Q3 GDP indicates no effect of Demonetisation

India’s gross domestic product (GDP) belied the forecasts of most of the economists and recorded a healthy 7 percent growth for the Q3/FY 2017. The pace of growth however slowed from 7.4 percent registered in Q2/FY 2017. Following this, the Central Statistics Office (CSO) has retained its projection for economy growth at 7.1 percent in 2016-17.

The impact of demonetisation was visible among consumers as the retail inflation plunged to the lowest level in five years in January 2017, as prices of vegetables and pulses declined further to 15.62 percent and 6.62 percent respectively.

However, the wholesale inflation accelerated to a 30 month high at 5.25 percent in January 2017, as rising global crude oil prices increased domestic fuel cost, even as food prices moderated.

The growth in the eight infrastructure sectors fell as the output of cement, refinery products and refinery products decelerated.