IMF cuts India's growth rate to 6.6% from 7.6% due to impact of demonetisation

The International Monetary Fund (IMF) has trimmed its GDP growth forecast for India by one percentage point in its latest report, citing the impact of demonetisation, and said the country would cede its position as the world’s fastest growing large economy in 2016, with China set to regain the top spot.

In its World Economic Outlook Update, the IMF has pegged India’s growth rate at 6.6 per cent for the ongoing financial year, and 7.2 per cent in 2017-18. It expects GDP growth to rise to 7.7 per cent in 2018-19.

“(This was) primarily due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative,” said the report released on Monday.

In October 2016, the IMF had projected a GDP growth of 7.6 per cent for India this fiscal year and the next.

Here’s a look at GDP estimates by other agencies and IMF’s forecast for the coming years.