No impact of demonetisation on GDP outlook

India’s GDP data for the July-September quarter, to be released today in the next few hours is likely to be around 7.5%. It will bear no impact of the demonetisation exercise announced on November 8.

Normal economic activity took place till October, so Wednesday’s data will reflect healthy growth, analysts said.

The demonetization exercise – leading to a sucking out of the high denomination notes of Rs 500 and 1000 will hit growth in the third quarter.

“GDP numbers will be around 7.5% in the second quarter, that has been our projection and we see no change in the number but we will revise our third quarter projection..the demonetization exercise will definitely have a negative impact on the growth figures,” DK Joshi, chief economist, Crisil told HT.

While think tanks vary on the quantum, the hit could be anywhere between 0.4%-0.5% for the third quarter, the second quarter will have no impact. However, National Institute of Public Finance and Policy (NIPFP) – a research unit under the finance ministry has projected a contraction.

HSBC has projected a hit of a percentage point for the whole fiscal. CARE said growth will be affected by 0.3-0.5% for the full year.