No demons from Demonetization as India records 7% growth in Q3

India will be the fastest growing economy among G-20 countries clocking a 7.1 per cent growth in 2017, Moody’s Investors Service said today.

The Indian economy had slowed in the fourth quarter of 2016 due to the withdrawal of 86 per cent of the currency in circulation — without an immediate replacement.

India’s annual economic growth slowed to 7.0 percent in the three months through December from a revised 7.4 percent expansion in the previous quarter, but it was much stronger than expected, government data showed on Tuesday.

“India is forecast to have the fastest growing economy among all G-20 countries with growth put at 7.1 per cent for 2017, down from a previous expectation of 7.5 per cent because of the effects of demonetisation,” Moody’s said.

Earlier, Paris-based think tank OECD today cut India’s growth forecast to 7 per cent for 2016-17 in view of demonetisation, but said the pace will accelerate to 7.3 per cent in the next fiscal.

The Organisation for Economic Cooperation and Development (OECD) had in February last year projected the country’s economy to expand at 7.4 per cent in 2016-17.

“India has been a star performer in gloomy times. We do not have many cases of 7 per cent growth… It is a top reformer among all the G-20 countries,” OECD Secretary-General Angel Gurria told reporters here.

The organisation forecast the country’s economic growth to rise further to 7.7 per cent in 2018-19.