New Delhi: The Asian Development Bank (ADB) on Wednesday lowered India's GDP forecast for the current fiscal by 0.3 per cent to 6.7 per cent, attributing it to tepid growth in the first half, demonetization and transitory challenges of tax sector reforms.
It has also revised downward the gross domestic product (GDP) outlook for next fiscal beginning from March 2018 to 7.3 per cent from 7.4 per cent mainly due to rising global crude oil prices and soft growth in private sector investment.
"Owing to tepid growth in the first half of 2017-18, the lingering effects of demonetization in November 2016, transitory challenges of a new tax system, and some risks to agriculture stemming from a spotty monsoon in 2017, the economy is now expected to grow by 6.7 per cent, slower than the 7 per cent forecast in the (September) Update," ADB said in a supplement to its Asian Development Outlook (ADO) on Wednesday.
India, the largest economy South Asia, rebounded to 6.3 per cent growth in the second quarter ended in September for this fiscal from 5.7 per cent in first quarter, reversing 5 consecutive quarters of deceleration.
However, ADO supplement expects growth to pick up in remaining two quarters of 2017-18 as the government is implementing measures to ease compliance with the new Goods and Services Tax (GST) as well as bank recapitalization.