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
65-yr-old from Buldhana arrested before reaching
Sheena Bora murder case accused Indrani Mukerjea
One of the highlights of pop rock band ...
90% of marriages in our country are still arrange
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)Ganesha says go ahead and indulge in your artistic self today. You can reorganise your home or work place. Expenses are on the cards. If you have been longing for that expensive dressing table or a study table, buy it. Indulgence is okay sometimes.
- Advertising -
As Stevie Wonder once said, ‘Just because a man l
Here’s your chance to meet some truly inspiring p
Diabetics must ensure that they maintain blood su
Read More