The International Monetary Fund, IMF, has trimmed India’s growth forecast for Financial Year 2017-18 but expects a revival as structural reform bears fruit.
In its latest World Economic Outlook released yesterday, the IMF lowered India’s growth forecast for 2017 to 6.7% from its earlier estimate of 7.2 per cent. It cited lingering impact of demonetisation and transition cost to the Goods & Services Tax (GST) For the slowdown.
IMF however said India is expected to regain the fastest growing major economy tag next year when it is forecast to grow 7.4 per cent, slower than earlier estimate of 7.7 per cent but higher than China’s 6.5 per cent.
IMF also expects the Indian economy to grow 8 per cent in the medium term on the back of reforms undertaken so far.
IMF forecast is the latest in the series of downgrades in India’s growth prospects unveiled by other multilateral agencies such as World Bank, Asian Development Bank and OECD.
Earlier this month, RBI lowered its growth forecast for 2017-18 to 6.7 per cent from 7.3 per cent.