The International Monetary Fund on Monday slashed India’s growth estimate for the current financial year to 6.6% from 7.6% and its forecast for 2017-’18 to 7.2%. In its latest World Economic Outlook update, it attributed the downgrade to demonetisation, saying the cash crunch had caused a “temporary negative consumption shock”.

India is likely to return to its earlier estimated growth rate of 7.7% in 2018, IMF said in its report, according to PTI. The international body predicted a 6.7% growth rate for China in the financial year ending March 2017.

The IMF predicted a better scenario for the next two years for other emerging and developing economies. Its global growth forecast for 2016-’17 remained unchanged at 3.1%, while its estimate for 2017 and 2018 stands at 3.4% and 3.6%, respectively. The last World Economic Outlook report was released in October 2016.

The IMF reduction of India’s growth forecast comes days after the World Bank slashed its estimate from 7.6% to 7% in the current financial year. The World Bank, too, held demonetisation responsible for the downgrade, saying the currency ban would continue to affect businesses and household economic activities in the short term as over 80% of all transactions in India were made in cash. Besides demonetisation, the international body had attributed the slump to low oil prices and poor agricultural output, which again is related to the note ban.

However, the World Bank had positioned India ahead of China as the fastest-growing emerging market economy in the world. It said India’s infrastructure sector would see more spending, which would serve to attract more investment in the near term.