GPCA ’16: India economy to bounce back from cash crisis

Source: ICIS News

2016/11/29

DUBAI (ICIS)--India’s economy will emerge strong in the next six month despite the current slowdown in polymer trade brought on by the cash crunch in the local market, industry sources said on Tuesday.

Good performance on the agricultural front indicates sound economic situation in the country, the sources said at the sidelines of the 11th Annual Gulf Petrochemicals and Chemicals Association (GPCA) Forum in Dubai.

“A good monsoon has yielded good agricultural output in 2016, and this is a strong indicator of how the economy will do in the next six months,” one of the sources said.

India remains an agrarian economy with agricultural output accounting for a significant portion of GDP, the source said.

The current slowdown in polymer business was primarily due to unavailability of cash – which stemmed from the government’s move to demonetize high-value rupee notes – and should ease when the new series of currency notes gain wide circulation, industry sources said.

“Demand fundamentals are still okay, although a lot of plans have now been postponed because a significant portion of business in the country is undertaken on cash basis”, the source said.

“Industries are expected to see a paradigm shift in the way business is done with improved transparency and efficiency,” the source said.

The GPCA forum in Dubai runs from 27-29 November.