The flow of money up to Q1 2018-19 : deposit growth continues to be weak, while credit growth shows signs of recovering

Deposit and credit growth

Deposit growth in the two years - 2014-15 and 2015-16 - preceding demonetisation and GST was 10.6% (June over June). This is higher than the 9.4% averaged in the demonetisation and GST years (2016-17:11.1% and 2017-18:7.6%).

Credit growth, using the same metrics as above, has recovered on average in the last two years (2016-17: 6% and 2017-18: 12.8%) to 9.4% from the same level as the two years preceding demonetisation and GST.

 Money Supply and Reserve Money

Money supply growth has decelerated to 8.6% in the demonetisation and GST years from 10.7% in the two years preceding it. This largely reflects largely the fall in deposit growth noted earlier.

 Reserve money numbers are volatile.