Consumption share in GDP to take a knock post demonetisation

Private final consumption expenditure accounted for 55.6% of GDP in FY16, down from 56.1% in FY14

Demonetisation could lead to a notable dip in the share of private consumption in India’s gross domestic product (GDP), pulling down economic growth during the second half of FY17 and beyond. In FY16, private final consumption expenditure (PFCE) accounted for 55.6 per cent of India’s GDP at constant prices down from 56.1 in FY14 and 10-year high of 60 per cent in FY09.

Economists expect the PFCE share to decline further in FY17 putting downward pressure on economic growth unless balanced by either higher government expenditure, investments or net exports (exports or goods and services minus imports). In the