Home / Knowledge / News / Textiles / Fitch cuts Indian FY17 GDP growth forecast to 6.9%
Fitch cuts Indian FY17 GDP growth forecast to 6.9%
01
Dec '16
India’s GDP growth rate is likely to decrease to 6.9 per cent from the previously predicted rate of 7.4 per cent due to temporary disruptions caused by the demonetisation of currency notes of high denominations, according to Fitch Ratings. It also said that the economic activities of the country are likely to be hit in the third quarter due to cash crunch.

The US based leader in financial information services has also revised the GDP growth forecast for the next to fiscals, lowering it to 7.7 per cent from the previously predicted rate of 8 per cent. Gradually implementing structural reform agenda and higher disposable income could result in a higher growth, said media reports quoting the ‘Global Economic Outlook - November’ report by Fitch Ratings.

Consumers are facing a liquidity crunch and are unable to make purchases. Supply chains have also been disrupted and the time spent in queuing up in banks has also affected general productivity, stated the report. The impact on the growth of India’s GDP will increase if the disruptions continue. Fitch added that the medium-term effect on GDP is not certain, but it is unlikely to be very large.

As new incentives for people avoiding cash transactions have not been introduced, the informal sector could go back to business as usual and people in this sector are likely to continue using high denomination currency notes or gold to store their wealth.

Monetary transmissions may have been impaired, but Fitch expects RBI’s 1.5 per cent policy rate cuts from early 2015 to contribute towards a higher GDP growth.

According to the report, a rise in low-cost funding because of demonetisation may remove a constraint on banks, which prevented lending rates from keeping pace with the RBI’s policy rate cuts. However, this is likely to depend on deposits remaining in banks beyond the next few months. (KD)

Fibre2Fashion News Desk – India


Interviews View All

Textile industry, Head honchos

Textile industry
Head honchos

RCEP was always going to be a double-edged sword

Abhishek Ganguly, Puma India

Abhishek Ganguly
Puma India

‘As a brand, Puma is always looking for new and innovative ways to inspire ...

Rashi Menda, Zapyle

Rashi Menda
Zapyle

Every fifth sale we make on Zapyle is a repeat purchase

Priyanka Gandhi,

Priyanka Gandhi

Established in 2016, Surat-based Shree Ganesh Yarns is a manufacturer of...

Laksheeta Govil,

Laksheeta Govil

Founded in 2014, Fizzy Goblet is a Delhi / NCR based handcrafted leather...

Michael Van Den Dolder,

Michael Van Den Dolder

Family-owned German textile machinery manufacturer Trützschler operates...

Eric Scholler, Groz-Beckert

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Silke Brand-Kirsch, Schlegel und Partner

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Pierre Wiertz, EDANA

Pierre Wiertz
EDANA

EDANA, the international association serving the nonwovens and related...

Seema Agrawal, Artisan Saga

Seema Agrawal
Artisan Saga

Artisan Saga, founded by Kaushik Rajani and Seema Agrawal, is an online...

Sidharth Sinha, Sidharth Sinha

Sidharth Sinha
Sidharth Sinha

<b>Sidharth Sinha</b> has contributed to the successful rebirth and...

Cigdem Akin, Cigdem Akin

Cigdem Akin
Cigdem Akin

She has carved a niche for herself as the national brand of Turkey. Her...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


November 2019

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

Follow us on instagram

Follow

Follow Fibre2Fashion On


Advanced Search