India to Grow at 7.7% in 2018-19 After Note Ban 'Disruption': IMF

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“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 IMF said.

Washington: Expecting a recovery from the “disruptions” caused by demonetisation, the International Monetary Fund (IMF) on Tuesday forecast India’s economic growth at 7.2% in the fiscal year 2017-18 and at 7.7% for 2018-19. It also recommended the removal of “long-standing structural bottlenecks” to enhance market efficiency.

In India, growth is projected to rebound to 7.2% in FY 2017-18 and further to 7.7% in FY 2018-19," the IMF said.

"Headwinds from weaknesses in India’s bank and corporate balance sheets will also weigh on near-term credit growth. Confidence and policy credibility gains, including from continued fiscal consolidation and anti-inflationary monetary policy, continue to underpin macroeconomic stability,” the IMF said.

According to the report, growth in Asia is forecast to accelerate to 5.5% in 2017 from 5.3% in 2016.

Growth in China and Japan is revised upward for 2017 compared to the October 2016 World Economic Outlook, owing mainly to continued policy support and strong recent data.