IMF lowers India’s growth projection, attributes it to demonetisation, GST


It also lowers the country’s growth for 2018 to 7.4%, 0.3 percentage points less than its previous two projections in July and April.

India’s economic growth for 2017 and 2018 will be slower than earlier projections, the International Monitory Fund (IMF) said in its latest World Economic Outlook released on October 10. The report cited “lingering impact” of demonetisation and the Goods and Services Tax for the expected slow down during the current and the next year.  

The IMF projected India to grow at 6.7% in 2017 and 7.4% in 2018, which are 0.5 and 0.3 percentage points less than the projections earlier this year, respectively.  

India’s slowdown is happening while the world economy is picking up steam and is projected to grow faster than earlier calculations, in 2017 and 2018. The IMF has revised upwards “global growth projections to 3.6% for this year and 3.7% for next — in both cases 0.1 percentage point above our previous forecasts,” Maurice Obstfeld, IMF Economic Counsellor and Director of Research, said at a press conference at the beginning of the World Bank-IMF annual meetings. Indian Finance Minister Arun Jaitley will attend the meetings.  

“Among emerging market and developing economies, higher domestic demand in China and continued recovery in key emerging market economies supported growth in the first half of 2017. In India, growth momentum slowed, reflecting the lingering impact of the authorities’ currency exchange initiative as well as uncertainty related to the midyear introduction of the country-wide Goods and Services Tax,” the report said.  

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