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Inflation is expected to moderate further: Dun & Bradstreet

Press Trust of India  |  New Delhi 

Low consumer demand and expected moderation in money supply owing to is likely to exert downward pressure on inflation, says a report by Dun & Bradstreet.

According to the report, following the move, there has been a decline in consumer demand and moderation in money supply, which in turn is expected to exert downward pressure on

D&B expects the to be in the range of 3.9-4.1 per cent and to be in the range of 3- 3.2 per cent during November this year, respectively.

"The dent in consumer demand, especially in the rural segment and expected moderation in money supply owing to is likely to exert downward pressure on inflation," Dun & Bradstreet Lead Economist Arun Singh said.

Regarding the of high value notes the report said that it is a welcome move even as it is expected to have an impact on the overall growth in the immediate future.

"Even if this measure does not eliminate the cash flow of black money, it would certainly raise the costs and risks of such activities significantly in future," Singh said.

He further noted that improved tax collection, increase in savings, transparency in the system and proliferation of a cashless economy are the big positives for the economy going ahead.

"However, the mid to long term multiplier effect through credit and investment channels can materialise only if the banks and the government decides to spend the money judiciously," he said adding that government spending is anticipated to increase strongly to pull in the private investment."

Prime Minister Narendra Modi had announced the of Rs 1,000 and Rs 500 notes on November 8, making these notes invalid.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, November 29 2016. 18:48 IST