IMF reduces India’s growth forecast to 6.7%

The International Monetary Fund (IMF) has recently released its October 2017 World Economic Outlook. In it, IMF slashed India’s growth forecast by 0.5% points to 6.7% in FY 18 due to the lingering effects of disruption caused by demonetisation and transition costs of GST. Earlier, in April, the IMF had pegged India’s GDP growth at 7.2% for FY18.
It has also lowered the growth projection for FY 19 ( 2018-19) to 7.4% from its earlier estimate in April and June of 7.7%. Though, the IMF was more optimistic about medium-term growth prospects for India through gains from the new indirect tax levy. Apart from IMF, the Reserve Bank of India (RBI) has also lowered its growth projection to 6.7% for the current financial year from its earlier estimate of 7.3% due to adverse impact on economic growth by the implementation of Goods and Services Tax (GST).