Demonetisation pulls down India's GDP growth to 7 per cent in Q3

According to a median of five economists' estimates surveyed by Mint, the economic growth in the third quarter this fiscal may decline to 6.1 percent.

In an another report, the statistical office announced that producer prices climbed at a slower pace of 1.5 percent annually in January, following a 2.5 percent rise in December.

Putting all the notions of demonetisation impacting the GDP growth in the third quarter of FY17 to rest, the Central Statistics office in a release noted that the country's growth domestic product for the third quarter came in at 7 per cent compared to the expectations of below 6 per cent growth.

On quarterly basis, the seasonally and working-day-adjusted GDP rose 1.9 percent in three-month period to December.

In its update to the World Economic Outlook (WEO) released in October, IMF said India is likely to grow 6.6% in 2016-17, against its earlier estimate of 7.6%.

This comes as a pleasant surprise as demonetisation effect do not seem to have affected the GDP growth by much.

The data further revealed that Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs. 40.97 lakh crore in 2016-17 as against Rs. 39.89 lakh crore in last fiscal.

At constant prices, the GFCF is estimated at Rs 35.55 lakh crore in 2016-17 as against Rs 35.35 lakh crore year-on-year.

The Economic Survey released nearly a month ago pegged the growth for the current fiscal at 6.5-6.75 per cent.

Refinery output fell 1.5 percent year-on-year last month, compared with a 6.4 percent growth in the previous month.

  • Zachary Reyes