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April 26, Wednesday 2017 1:39 PM       

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       BUSINESS Next Article: Biz yet to fully recover from demonetisation impact: Bosch  
       Economy to grow 7.1% in FY17, Dec qtr GDP surprising: Fitch
 
         Posted on :18:58:50 Mar 7, 2017
   
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       Last edited on:18:58:50 Mar 7, 2017
         Tags: Economy, GDP, Fitch
 
NEW DELHI: Global rating agency Fitch today said Indian economy will grow by 7.1 per cent in the current fiscal before stepping up to 7.7 per cent in the next two financial years.
 
The US-based agency, however, termed the 7 per cent GDP growth for the October-December quarter as "surprising", a tad lower than 7.4 per cent in the previous quarter.
 
"This number looks somewhat surprising, as real activity data released since demonetisation pointed to weak consumption and services activity because these transactions are cash-intensive. By contrast, official data suggest that private consumption was strong in the fourth quarter of 2016 (though services output growth moderated quite substantially)," Fitch said.
 
Fitch expects Indian GDP to grow by 7.1 per cent for 2016-17, before picking up to 7.7 per cent in both 2017-18 and 2018-19.
 
It said the December quarter GDP number suggests that economic activity was "hardly hit" by the cash crunch after the government's move to remove 86 per cent of currency in circulation overnight.
 
On this discrepancy, Fitch said it could be the inability of official data to capture the negative effects of the demonetisation on the informal sector.
 
However, the formal sector remained surprisingly robust.
 
"This raises the possibility that these initial estimates of the growth impact of demonetisation could well be underestimated, with the possibility of revisions to official GDP data later on," it said.
 
"Gradual implementation of the structural reform agenda is expected to contribute to higher growth, as will higher real disposable income, supported by an almost 24 per cent hike in civil servants' wages at the state level," Fitch said.
 
Fitch projection of growth for this fiscal is in line with the estimates of CSO and global think-tank OECD.
 
The rating agency said it expects the policy interest rate to stay at its current level of 6.25 per cent. 
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       BUSINESS
Next Article: Biz yet to fully recover from demonetisation impact: Bosch
 
 
BUSINESS HEADLINES
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Nifty closses above lifetime high of 9,300-mark  
PM to review infra performance with officials today  
US dollar ends sharply lower against rupee  
Sensex rebounds 291 pts; French Prez race, RIL Q4 in limelight  
Thailand expects 12 lakh tourists from India in 2017  
GST great illustration of cooperative federalism: Modi  
Niti Aayog lists promoting digi-payments as achievement  
Hero Cycles eyes setting up Rs 400 cr project  
Impact of demonetisation abated: IMF  
Mistry appeals against NCLT rejecting waiver plea in Tata case  
Air India lowers age limit for elderly travel concession  
SEBI court quashes non-bailable warrant against Sahara chief  
India needs to accelerate investment in children, education:WB  
Sensex extends gains, up 86 pts on bargain hunting  
Jaitley may take up H-1B visa issue with US authorities  
'India moving forward to become major destination for FDI'  
Sensex surrenders early gains, falls 95 pts  
Apple, Coke, Airtel among cos pulled up for 143 misleading ads  
Inflation cools to 5.7%, food prices heat up  
Nifty regains 9,200-level in early trade  
SC orders auction of Sahara's Amby Valley  
Railways to export locos, train sets worth Rs. 680 cr to Lanka  
Sensex edges lower by 88 pts on global weakness  
Netizens uninstall Snapdeal app instead of Snapchat  
 
Should Senkumar be reinstated as DGP, law and order?
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