India: GDP for Q1 2017 expected to come in relatively strong at 7.1% Y/Y - TDS

Analysts at TDS expect India’s GDP for Q1 2017 (Q4 of FY2016/17) to come in relatively strong at 7.1% Y/Y (up from 7.0% in the prior quarter), apparently shrugging off the biggest concerns that demonetisation should have had dire effects on economic activity since November of last year.

Key Quotes

“If these figures are confirmed, growth for the full FY2016/17 should also be confirmed at around 7.1% Y/Y, in line with the previous year. Private consumption has held up reasonably well despite the demonetisation shock, with industrial activity likely to have picked up during the quarter. Government consumption, net of the wage increases mandated by the 7th Pay Commission, has been fairly restrained, however. We see a moderate downside risk of 0.1-0.2ppt to the consensus expectations.”