The IMF on Tuesday lowered India's growth projection to 6.7 percent in 2017, 0.5 percentage points less than its previous two forecasts in April and July, attributing it to demonetisation and introduction of the GST.
It also lowered the country's growth for 2018 to 7.4 percent, 0.3 percentage points less than its previous two projections in July and April.
India's growth rate in 2016 was 7.1 percent, which saw an upward revision of 0.3 percentage points from its April report.
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 TaxWorld Economic Outlook
The latest report, released ahead of the annual meetings of the IMF and the World Bank here this week, puts China slightly ahead of India in terms of growth rate for the year 2017.
China is projected to grow at 6.8 percent in 2017, which is 0.1 percentage more than its two previous projections in April and July.
However, India is likely to regain the tag of the fastest growing, emerging economies of the world in 2018, with China projected to grow at 6.5 percent in 2018, it said.
The GST is among several key structural reforms under implementation that are expected to help push growth above eight percent in the medium term, the report said.
In India, simplifying and easing labour market regulations and land acquisition procedures are long-standing requirements for improving the business climate.
The IMF also said the global economic recovery is continuing at a faster pace as it upgraded its growth projection to 3.6 percent for 2017, citing an upswing in countries like China, Japan, Russia, and some emerging economies in Europe.
It said the global growth forecast for 2017 and 2018 -- 3.6 percent and 3.7 percent, respectively -- is 0.1 percentage point higher in both years than in the April and July forecasts.
Notable pickups in investment, trade, and industrial production, coupled with strengthening business and consumer confidence, are supporting the recovery.
With growth outcomes in the first half of 2017 generally stronger than expected, upward revisions to growth are broad based, including for the eurozone, Japan, China, emerging Europe, and Russia.
These more than offset downward revisions for the United States, the United Kingdom, and India.
According to the IMF official, the current global acceleration is also notable because it is broad-based - more so than at any time since the start of this decade.
This breadth offers a global environment of opportunity for ambitious policies that will support growth and raise economic resilience in the future.
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