Citing debilitating impact of the demonetization drive on the economy, domestic rating agency Icra on Monday forecast a 40 bps dip in growth rates to 7.2% in the second quarter of the current fiscal. "We expect gross value added (GVA) growth at basic prices to print at 7.2% in Q2, lower than 7.6% projected earlier and also mildly lower than the year-ago period, due to demonetization. Accordingly, the pace of expansion of GVA at basic prices is expected to ease mildly to 7.2% in Q2 from 7.3% each in Q2 of 2015-16 and Q1 of 2016-17. Icra expects industrial growth to ease to 5.5% in Q2 from 6.3% a year ago, led by the manufacturing, mining and electricity sub-sectors. Nevertheless, given the lagged effect of a rise in commodity prices amid modest demand and an unfavourable base effect, real manufacturing GVA growth to decline to 7% in Q2 from 9.2%" Nayar said.

Source: dna November 21, 2016 14:31 UTC