Mumbai: The decision to withdraw the 2,000 rupee note and the response so far suggests the move could help boost FY2024 GDP estimated to grow at over 6.5% RBIreported Monday.
Real GDP growth in Q1 FY24 is projected to be 8.1% with an upward bias. Reserve Bank of IndiaEconomists at the country’s largest financial institution said it could beat expectations by as much as 6.5%. SBI Said.
“We forecast 8.1% GDP growth in the first quarter of 2024, albeit with an upward bias due to the impact of the 2000 rupee note withdrawal event. It confirms our forecast that it could exceed 6.5%,” the memo said.
Notably, the central bank announced earlier this month that more than half of the notes of this denomination had been returned, 85 percent of which had been deposited in banks and the remaining 15 percent had been exchanged at bank tellers. .
Based on this experience, SBI Note said the move could increase consumption by Rs 55 crore.
The report estimates that 3.08 billion rupees will be returned to the system as deposits, of which 920 billion rupees will be credited to savings bank accounts and 60 per cent of which will be withdrawn immediately5. It is expected to bring about an increase in consumption of Rs 50 crore.
In the long run, the effect could reach Rs 1.83 crore due to consumption multiplier, he added.
“One of the main benefits of withdrawing the 2000 rupee note may be an immediate increase in consumer demand,” the report said.
The memo said big sums of money could shift to high-end spending on gold, jewelry, luxury durables like air conditioners, mobile phones and real estate.
Online grocery collection site Zomato reports that three-quarters of its users opt for cash payments in 2,000 rupee notes, citing reports of an increase in fuel payments and cash deliveries. bottom.
SBI economists also expect the RBI’s move to boost donations to temples and other religious sites through the 2,000 rupee note, and encourage purchases of durable goods and miscellaneous goods such as luxury furniture. said.
The Reserve Bank of India’s retail central bank digital currency (CBDC), which has already been tested with a tight group of users, will benefit from the move to withdraw the 2,000 rupee note, according to the memo.
“The absence of high denomination banknotes should further accelerate the adoption of E-RUPI for merchant transactions, alongside physical fiat currency,” the paper said.
Real GDP growth in Q1 FY24 is projected to be 8.1% with an upward bias. Reserve Bank of IndiaEconomists at the country’s largest financial institution said it could beat expectations by as much as 6.5%. SBI Said.
“We forecast 8.1% GDP growth in the first quarter of 2024, albeit with an upward bias due to the impact of the 2000 rupee note withdrawal event. It confirms our forecast that it could exceed 6.5%,” the memo said.
Notably, the central bank announced earlier this month that more than half of the notes of this denomination had been returned, 85 percent of which had been deposited in banks and the remaining 15 percent had been exchanged at bank tellers. .
Based on this experience, SBI Note said the move could increase consumption by Rs 55 crore.
The report estimates that 3.08 billion rupees will be returned to the system as deposits, of which 920 billion rupees will be credited to savings bank accounts and 60 per cent of which will be withdrawn immediately5. It is expected to bring about an increase in consumption of Rs 50 crore.
In the long run, the effect could reach Rs 1.83 crore due to consumption multiplier, he added.
“One of the main benefits of withdrawing the 2000 rupee note may be an immediate increase in consumer demand,” the report said.
The memo said big sums of money could shift to high-end spending on gold, jewelry, luxury durables like air conditioners, mobile phones and real estate.
Online grocery collection site Zomato reports that three-quarters of its users opt for cash payments in 2,000 rupee notes, citing reports of an increase in fuel payments and cash deliveries. bottom.
SBI economists also expect the RBI’s move to boost donations to temples and other religious sites through the 2,000 rupee note, and encourage purchases of durable goods and miscellaneous goods such as luxury furniture. said.
The Reserve Bank of India’s retail central bank digital currency (CBDC), which has already been tested with a tight group of users, will benefit from the move to withdraw the 2,000 rupee note, according to the memo.
“The absence of high denomination banknotes should further accelerate the adoption of E-RUPI for merchant transactions, alongside physical fiat currency,” the paper said.
