Afternoon D & C Dedicated To Mumbai
Home > Business > Demonetisation: GDP may slump to 5% in Dec qtr, says HSBC

Demonetisation: GDP may slump to 5% in Dec qtr, says HSBC

Friday, January 06, 2017

India's GDP is likely to have grown at a much slower-than-expected pace of 5% in the October-December period and may see a 6% growth in the following quarter due to a slow down in manufacturing and services sectors post demonetisation, says an HSBC report.

According to the global financial services major, activity data across manufacturing and services as well as consumption and investment have clearly taken a hit after November 8, 2016, when the government announced scrapping old 500/1,000 rupee notes. "We expect GDP to grow 5.0% in the October- December quarter and 6.0% in the January-March quarter, about 2 percentage points lower than we had expected before the demonetisation was announced," HSBC said in a research note.

Post the March quarter, the economic growth is expected to normalise gradually towards the 7% level, it added. "Thereafter (after January-March period), we expect growth to normalise gradually towards the 7% ballpark, but remain shy of the 7.5-8% range in FY18, due to adjustment costs that businesses and consumers face, in the process of formalisation and digitisation," the report added.

The Reserve Bank is expected to adopt an accommodative policy stance to spur growth. "On the back of our expectation of lacklustre investment growth, we expect the RBI to deliver a 25 bps rate cut in the February meeting," HSBC said. On December 7, the central bank kept interest rate unchanged despite calls for lowering it and also lowered the economic growth projection by half a percentage point to 7.1% in the first policy review post demonetisation.

COMMENTS
No Comments Posted
POST YOUR COMMENTS
Name:  
 
Email:    
Comments:
 
 
City news
Inmates to meet relatives in all-new ‘Transparent
Mumbai University strive to wrap up semester V ...
In a bid to facilitate investments into the ...
We hear words such as ‘Adolescence’ and ‘Puberty’
Dr. Rajan B. Bhonsle, M.D. (Bom)
Consulting Sex Therapist & Counsellor
Dr. (Mrs.) Minnu R. Bhonsle, Ph.D.
Consulting Psychotherapist & Counsellor
Astrology
Select Sun sign:
 
Aries (Mar 21 - Apr 20)
Aries (Mar 21 - Apr 20)You could be under heavy pressure at work. Refuse fresh offers until pending matters are successfully and quickly concluded in your favor. You will soon receive substantial profit for your efforts. Your accomplishments will be greatly lauded. Your priorities could be about work but your mate or beloved may not agree. Either find the time or face an irate mate.
- Advertising -
For the seventh consecutive week, the benchmark B
India will overtake China to be the fastest growi
The Reserve Bank has called for putting in place
Read More