All content in this website is sourced legitimately
Demonetization: Growth pegged lower at 6.6%
Jan 05:
Demonetization is beginning to bite in some segments of the economy.
8Six weeks on, there is now data available for various lead indicators of economic activity, which have displayed a mixed trend in November 2016.
8Some underlying themes related to the short term impact of the note ban on economic activity have been identified, chiefly healthy production in the organised sectors; disruptions in the labour/cash intensive and relatively unorganised sectors resulting in a loss of income for businesses and workers; and deferral of discretionary consumption. The pace of revival of economic activity in Q4 FY2017 is likely to depend on how quickly currency in circulation is replenished and digital transactions become widespread.
8Regardless, sluggish consumption is expected to weigh upon capacity utilisation in H2 FY2017, delaying private sector investment plans.
8Profitability in various sectors in H2 FY2017 is likely to be under pressure on account of rising raw material costs, particularly fuels and metals, lower volumes as well as discounts given to attract buyers.
8Although currency liquidity is likely to improve significantly by the end of January 2017, economic activity may take longer to normalise, based on which at least one forcasting agency has revised the growth in FY2017 to 6.6%.
Click on Reports for more
**********************************
8Six weeks on, there is now data available for various lead indicators of economic activity, which have displayed a mixed trend in November 2016.
8Some underlying themes related to the short term impact of the note ban on economic activity have been identified, chiefly healthy production in the organised sectors; disruptions in the labour/cash intensive and relatively unorganised sectors resulting in a loss of income for businesses and workers; and deferral of discretionary consumption. The pace of revival of economic activity in Q4 FY2017 is likely to depend on how quickly currency in circulation is replenished and digital transactions become widespread.
8Regardless, sluggish consumption is expected to weigh upon capacity utilisation in H2 FY2017, delaying private sector investment plans.
8Profitability in various sectors in H2 FY2017 is likely to be under pressure on account of rising raw material costs, particularly fuels and metals, lower volumes as well as discounts given to attract buyers.
8Although currency liquidity is likely to improve significantly by the end of January 2017, economic activity may take longer to normalise, based on which at least one forcasting agency has revised the growth in FY2017 to 6.6%.
Click on Reports for more
