New Delhi [India], Jan. 17 : The International Monetary Fund (IMF) on Tuesday announced a cut in India's growth rate for the current fiscal year to 6.6 percent from its previous estimate of 7.6 percent due to consumption weakness courtesy demonetisation.

Earlier, the World Bank had also decelerated India's growth estimates.

As per the IMF's latest World Economic Outlook (WEO) update released today, the growth forecast in India for the current (2016-17) and next fiscal year has been trimmed by one percentage point and 0.4 percentage point respectively.

The cut comes primarily due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative.

The IMF has said economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies, after a lack lustre outturn in 2016. The global growth for 2016 is now estimated at 3.1 percent, in line with the October 2016 forecast.

Going by the IMF's new projections, India's growth in 2016 is now estimated to be 6.6 percent as against 7.6 percent earlier forecast.

In 2017, the IMF has projected a growth rate of 7.2 percent as against its previous forecast of 7.6 percent. The Indian economy is likely to revive to go back to its previously estimated growth rate of 7.7 percent in 2018, according to the WEO update.

The cut in India's growth rates comes days after the World Bank decelerated India's GDP growth for 2016-17 fiscal to seven percent from its previous estimate of 7.6 percent citing the impact of demonetisation.

India's growth rate in 2017 as per the latest IMG projections is 7.2 percent. In 2018, China's growth rate is projected to be six percent against India's 7.7 percent. (ANI)