New Delhi: Global rating agency Fitch said on Tuesday that the benefits of demonetisation are highly uncertain.
“The demonetisation of large-denomination bank notes has caused short-term disruption in India’s economy and led us to downgrade our growth forecasts for 2017. The move has some potential benefits, but the positive effects are unlikely to be strong or last long enough to make a significant difference to government finances or medium-term growth prospects,” said Fitch.
The rating agency said that supply chains have been disrupted and time spent queuing up at banks has meant lost hours of productive work. “The impact on the economy will increase the longer the disruption continues, but Fitch has already revised downwards its GDP growth forecast for the financial year ending March 31, 2017 (FY17) to 6.9 per cent from 7.4 per cent,” it said.
