India's Economy Likely To Expand At Steady Pace
May 29 2017 - 4:27AM
RTTF2
India's economy is set to grow at a steady pace in the March
quarter of 2017 as the impact of demonetization has started to fade
in many sectors.
Gross domestic product is forecast to expand 7 percent in the
March quarter, unchanged from the previous three months. The
Central Statistics Office is slated to publish the data on May
31.
At the April monetary policy meeting, the Reserve Bank of India
said gross value added growth is likely to strengthen to 7.4
percent in 2017-18 from 6.7 percent in 2016-17, with risks evenly
balanced.
The central bank said the effects of demonetization should fade
away by the fourth quarter of 2016-17.
Shilan Shah, an economist at Capital Economics, noted that the
the impact of demonetisation has varied across different sectors of
the economy.
The economist said areas other than vehicle production and rail
passenger volumes, appeared to have been unscathed from
demonetisation.
Further, the tourism sector has held up well in recent months
and remains one of the economy's bright spots, Shah said.
Purchasing Managers' survey data from IHS Markit showed that the
manufacturing sector expanded in April on strong new orders.
According to the new series of industrial production launched by
the statistical office, growth in the sector continued this year.
Production expanded 2.7 percent in March and by 1.9 percent in
February.
The introduction of goods and sales tax is also set to underpin
economic activity.
The International Monetary Fund projected India to expand 7.2
percent this year and 7.7 percent next year.
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