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Last Updated : Mar 01, 2017 10:11 AM IST | Source: CNBC-TV18

Higher reported income after note ban may have magnified GDP: CS

Deepali Bhargava, Economist at Credit Suisse expects GDP growth to accelerate to 7.4 percent in FY18.

Higher reported income due to the shift to the organised sector post the demonetisation exercise might have lifted the gross domestic product (GDP) numbers for the quarter, feels Deepali Bhargava, Economist at Credit Suisse.

She sticks to her current year GDP target of 6.9 percent but sees the economy accelerating to 7.4 percent in FY18.

The Indian economy grew at a surprisingly fast 7 percent in October-December 2016, from 7.4 percent in the previous quarter, government data showed on Tuesday. The data, put out by the Central Statistics Office (CSO), also projected India's “real” or inflation-adjusted gross domestic product (GDP) growth at 7.1 percent in 2016-17, down from previous year’s 7.9 percent expansion.

Also read: GDP surprises, grows 7 percent in Oct-Dec; full year estimates at 7.1 percent

Even as Credit Suisse was relatively more optimistic on the numbers than most others, Bhargava told CNBC-TV18 it was still a surprise and looked “too good to be true”.


If this is a data distortion then it would certainly be a one-off, she says, adding, she would prefer to stick to high frequency indicators.

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First Published on Mar 1, 2017 10:11 am