IMF has cut down India's growth rate for the current fiscal year to 6.6 percent. The previous estimate was 7.6%.
The slowing of the growth rate is on account of temporary negative consumption shock of demonetisation after the WB decelerated India's growth estimates.
Growth forecast for the current and next fiscal year were trimmed by one percentage and 0.4 percentage points, due to temporary negative consumption shock .
This has been caused by cash shortage and payment disruption noted with recent currency note withdrawal and exchange, as per World Economic Outlook released by the IMF.
IMF also said after a lackluster outturn in 2016, economic activity will pick up in the next 2 years. This is more so for the emerging market and developing economies.
Global growth for 2016 is now 3.1 percent in line with the Oct 2016 forecast.
The economic activities in emerging markets and developing economies/EMDEs is to accelerate in 2017-2018 with global growth at 3.4 and 3.6 percent respectively.
India's growth in 2017 is projected at growth rate of 7.2% as against previous growth forecast of 7.6 percent.
Indian economy is expected to revive with 7.7% growth in 2018.
Cut in the growth rate comes after WB decelerated India's GDP growth for 2016-2017 fiscal to 7 percent from previous estimate of 7.6 percent citing impact of demonetisation.
India would regain momentum in coming years. India continues to be among the fastest growing countries in the emerging economies.
In 2016, China with a growth percentage of 6.7% has outperformed India. IMF has forecasted China's growth rate to 6.5% for 2017 based on continued policy support.
In 2018, China is projected to grow at 6 percent against India's 7.7%.
IMF: Know More- Abbreviation stands for: International Monetary Fund
- Formation: 27 December 1945
- Type: International financial institution
- Headquarters: Washington, D.C., United States
- Membership: 189 countries
- Official language: English
- Managing Director: Christine Lagarde
- Main organ: Board of governors
- Parent organization: United Nations
- Staff: 2,700
