Rating agency Moody’s said that demonetisation could lower demand for the auto and the real estate sectors in the near-term, but maintained an overall ‘stable’ outlook for these sectors.
“Companies in the auto sector should benefit from improving customer sentiment following an above-average monsoon season, as well as from expected falling vehicle prices following the implementation of the goods and services tax in April 2017 that will replace a web of taxes,” according to a statement. It added that in the near-term, however, sales volumes could get impacted by the demonetisation move.
Further, Moody's said in the real estate sector, it expected sales volumes to be negatively affected because of demonetisation. However, it added that volumes would start to pick up as interest rates decline.
