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India FY18 GDP growth likely at 7.1% as firms resort to restocking: Nomura

Nomura said ongoing remonetisation will have positive impact on cash-intensive services sectors

Press Trust of India  |  New Delhi 

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India's is expected to be around 7.1 per cent this fiscal following a likely pick up in industrial production as firms resort to 'restocking' post-(GST) especially ahead of festive season, says a

According to the Japanese financial services major, post-is likely to drive a faster pace of industrial output in the coming quarters.

Before the implementation of GST, destocking was triggered largely owing to a steep fall in demand from consumers as they delayed purchases. Post implementation, might pick up in anticipation of rising demand conditions.

Nomura further said the ongoing remonetisation will have a positive impact on the cash-intensive services sectors and this, in turn, will help to augur numbers.

"On the growth front, we expect industrial production to gradually pick up as firms focus on after and especially ahead of the festive season; hence we think the recovery will likely continue to be led by consumption," Nomura said.

"Overall, we expect growth of 7.1 per cent year-on- year and GVA growth of 6.7 per cent in 2017-18 (year ending March 2018)," it said.

According to Central Statistics Office (CSO) data, the index of industrial production (IIP) during July slipped to 1.2 per cent on account of the poor manufacturing show, while retail inflation rose to a 5-month high of 3.36 per cent in August due to costlier vegetables and fruits.

Commenting on the data, the report said, "Overall, the industrial production data suggest that the industrial growth recovery is still uneven with weak investment demand, but also currently depressed due to GST effects".

Regarding inflation data, it said that while demand-side price pressures remain contained, supply side and statistical factors like food prices, GST and HRA are driving inflation higher.

First Published: Thu, September 14 2017. 01:23 IST