India's GDP projected to slow to 6.6% post-DeMo: IMF

February 22, 2017 19:59

India's growth is projected to slow to 6.6 per cent in 2016-17 fiscal due to the strains that have emerged in the economy as a result of "temporary disruptions" caused by demonetisation, the International Monetary

Fund said on Wednesday.

In its annual report, however, the IMF said demonetisation would have only short term impact on the economy and it would bounce back to its expected growth of more than eight per cent in the next few years.

The post-November 8, 2016 cash shortages and payment disruptions caused by the currency exchange initiative have undermined consumption and business activity, posing a new challenge to sustaining the growth momentum, the IMF said in its annual country report on India.

"Growth is projected to slow to 6.6 per cent in FY2016/17, then rebound to 7.2 per cent in FY2017/18, due to temporary disruptions, primarily to private consumption, caused by cash shortages," it said.

India's economy grew at 7.6 per cent in 2015-16.

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