Skip to content
Subscriber Only

India Economy Trails Forecasts as Cash Ban Continues to Weigh

  • GDP grew at 6.1 percent for the quarter ended March 2017
  • Economists predicted 7.1 percent as per Bloomberg survey
Bloomberg business news

DBS' Rao Sees India GDP Reviving in 2Q

Updated on

India’s economy grew at the slowest pace in more than two years in the first quarter, dragged down by Prime Minister Narendra Modi’s cash ban in November and the weight of the country’s bad bank debts.

Economic growth weakened, driven down by the shock clampdown on high-value notes in November last year and affected in part by a change in the ministry’s accounting method to determine expansion. The figure was out of step with the purchasing managers’ manufacturing and services sectors that all showed signs of recovery, as well as the bumper food grain output estimated during 2016-17. As the Modi government gears up for the July 1 roll out of the new national sales tax, this will dent policy makers hopes that India will retain its spot as one of the world’s fastest-growing economies.