India may lose the “fastest growing major economy” tag to China in 2016-17 with the International Monetary Fund (IMF) lowering India’s growth forecast for the year by a full percentage point to 6.6% because of disruption caused by the government’s move to invalidate high-value currencies.
In its update to the World Economic Outlook (WEO) released in October, IMF said India is likely to grow 6.6% in 2016-17, against its earlier estimate of 7.6%. IMF said the Chinese economy grew by 6.7% in 2016 as against the previously projected 6.6%. China’s growth forecast in 2017 was raised to 6.5% from 6.2% projected in October due to “expected policy stimulus”.
IMF also expects India’s growth to pick up at a slower pace in 2017-18, at 7.2%, against its earlier estimate of 7.6%.
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