India’s GDP numbers for the fiscal 2015-16 and 2016-17 are expected to be revised to 8.3 per cent and 7.6 per cent, respectively, because of new IIP and GDP series, says a report. According to SBI’s research report Ecowrap, the GDP numbers scheduled to be released on May 31, is expected to be “pleasant affair” and the new IIP and WPI series will impact all GDP numbers from 2013-14.
“We expect 2013-14 GDP growth to be revised from 6.5 per cent to 7.3 per cent, while 2015-16 GDP is expected to be revised from 7.9 per cent to 8.3 per cent because of new IIP and GDP series. 2016-17 GDP growth is expected to be revised from 7.1 per cent to 7.6 per cent,” the Ecowrap report said. It further said the level of remonetisation has reached 80 per cent of the total extinguished currency in circulation as on May 19, 2017.
“We also estimate that nearly 65 per cent of incremental deposits of Rs 7 lakh crores that came into the system between November 8, 2016 and May 12, 2017 is still sloshing around,” it said. A better GDP number, coupled with abundant liquidity and very soft inflation numbers going forward, will make the job of RBI monetary management relatively “difficult”, the report authored by Soumya Kanti Ghosh, Chief Economic Adviser, Economic Research Department, SBI said.
“However, given the disruption of informal sector activity in FY17, we still believe new volatile IIP series has opened up a Pandora’s box of description of current economic activity. Also, industrial activity has decelerated in H2FY17 to half of what was it in H1FY17. The RBI thus needs to look at all these for its policy action going forward,” the report added.