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June 28, Wednesday 2017 5:42 AM       

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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
EU fines Google $2.72 bn for breaching antitrust rules  
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Sensex, Nifty take a selling hit, reverse gear  
EU to slap Google with record fine this week: sources  
Kerala govt investing Rs 50,000 cr on infra projects: Issac  
AI privatisation welcome but clear salary dues first: Pilots  
Rupee halts 3-day slide v/s USD; up 7 paise at 64.52  
Spice GST Suvidha provider is all geared up for July 1st  
Sensex tumbles 153 pts on profit-booking  
Sensex hits all-time high of 31,522  
RBI to keep rates unaltered in near term: D&B  
Sensex surrenders record gains on GST blues, mixed global cues  
GST to be rolled at midnight June 30: Jaitley  
India plans SAARC meet for startups: Nirmala  
Rupee gains 11 paise against dollar, stocks play anchor  
"Rs 700 cr worth of Momentum Jharkhand proposals implemented"  
JK govt to seek complete consensus before GST implementation  
Mobile data consumption rose 142% in last 3 yrs: Kant  
Gold loses sheen on weak global cues, muted demand  
Rupee opens lower by 15 paise against dollar  
Nifty ends below 9,600 post Fed rate hike  
Paytm, 1mg offer discounts ahead of GST  
Customers may get Rs 5,000 if int'l SIM card fails  
Sensex closes higher, Nifty advances as inflation cools  
RBI issues new Rs.500 bank notes with inset letter 'A'  
 
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