Key Highlights:

  • Q4FY17 GDP numbers stood at 6.1% 
  • Real GDP at constant (2011-12) prices for FY17 at 7.1%
  • India's GDP is expected at 6.6% in Q1FY18

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When demonetisation move was announced, analysts and economists predicted that India's Gross Domestic Product (GDP) will be impacted in the coming quarters as consumption demand of various sectors was hampered severely during the period. 

However, India's GDP data in last quarter of FY17 defied the impact of demonetisation.  

In Q4FY17, India's GDP numbers missed estimates and dropped to 6.1%. While  Real GDP at constant (2011-12) prices for FY17 is estimated at Rs 121.90 lakh crore showing a growth rate of 7.1% over the year 2015-16 of Rs 113.81 lakh crore, as per CSO.

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HDFC Bank said, "The sharp slowdown in Q4 should be partly seen in light of a higher deflator impact, which is visible in the difference between growth in nominal and real terms –nominal GVA expanded by 11.3% in Q4, but in real terms the growth fell down to 5.6% in Q4 reflecting a higher GVA deflator (5.7%).”

Similarly, SBI highlighted the performance of sectoral GVA deflator in percentage terms. It stated that the economy was in slowdown mode till first half of FY17 (before demonetisation) and has actually accelerated in the second half.

 

Q4FY17 GDP at 6.1% but some sectors defied demonetisation impact
What will India's FY18 GDP growth look like?