India to grow at 7.2 per cent in 2017-18: IMF

India’s growth is expected to rebound to 7.2 per cent in the 2017 18 fiscal and 7.7 per cent in 2018-19 after ‘disruptions’ caused by demonetisation, the IMF said on Tuesday, while recommending removal of long- standing ‘structural bottlenecks’ to enhance market efficiency.

The temporary disruptions (primarily to private consumption) caused by cash shortages accompanying the currency exchange initiative are expected to gradually dissipate in 2017 as cash shortages ease, the International Monetary Fund said in its regional economic outlook.

Such disruptions would also be offset by tailwinds from a favourable monsoon season and continued progress in resolving supply-side bottlenecks, the IMF said.

The investment recovery is expected to remain modest and uneven across sectors as deleveraging takes place and industrial capacity utilisation picks up, it noted.

“In India, growth is projected to rebound to 7.2 per cent in FY2017 18 and further to 7.7 per cent in FY2018 19”, the IMF said.


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