IMF pegs India’s GDP growth at 7.7% in 2018-19

International Monetary Fund (IMF), the international organization headquartered in Washington, has estimated that India's GDP growth will bounce back to 7.2% in the 2017-18 fiscal, and increase to 7.7% in 2018-19. However, for that to happen, it recommended that the long-standing structural restrictions be removed so that market efficiency can be increased.

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After demonetisation, there was a temporary disruption in the Indian economy, caused by the lack of ready cash available with spenders. This disruption, said IMF, will settle down in 2017.

Other than remonetisation being substantially completed, a favourable monsoon season and developments in removal of supply-side difficulties will also help in balancing this disruption.

Also read: GDP growth outplays 'Demonetisation' worry, 7% growth in Q3

"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.

Talking of Asia on the whole, the report estimates that the growth will accelerate to 5.5% this year from 5.3% in last fiscal.