IMF cuts India's GDP forecast for FY17 to 6.6%

The International Monetary Fund (IMF) cut India's growth forecast for the current financial year (FY17) by 1% and cut it by 0.4% for the next fiscal year. The reason for this is primarily due to the demonetisation move taken by the government in November 2016.

PM Modi speaking a story at a conference. Photo: IANS

The International Monetary Fund (IMF) cut India's growth forecast for the current financial year (FY17) by 1% and cut it by 0.4% for the next fiscal year. The reason for this is primarily due to the demonetisation move taken by the government in November 2016.

This brings India's growth forecast in FY17 down to 6.6%, against the earlier estimate of 7.6%.

It said the move had resulted in temporary negative consumption shock which induced by cash shortages and payment disruptions.

This means that India will lose its “fastest growing economy” title to China. At the same time IMF in the World Economic Outlook report has upped its growth estimates of China. IMF during the same period increased China's growth to 6.7% in FY17 from a 6.5% growth projected in October.