The International Monetary Fund on Tuesday slashed India’s Gross Domestic Product growth forecast for the 2017-’18 financial year to 6.7% in its World Economic Outlook report for October. In its April and July reports, the IMF had predicted that India would grow at 7.2% in 2017-’18.

The international organisation also reduced India’s projected GDP growth rate for 2018-’19 from 7.7% to 7.4%. “In India, growth momentum slowed, reflecting the lingering impact of the authorities’ currency exchange initiative [demonetisation] as well as uncertainty related to the midyear introduction of the country-wide Goods and Service Tax,” the IMF said in its October report. India’s GDP growth rate fell to 5.7% for the first quarter of 2017-’18.

However, the report added that the GST, “which promises the unification of India’s vast domestic market, is among several key structural reforms under implementation that are expected to help push growth above 8% in the medium term”.

In comparison, China will grow at 6.8% in 2017-’18, the IMF report said.

The IMF’s growth forecast of 6.7% for India in 2017-’18 matches that of credit rating agency India Ratings. India Ratings on September 27 had said that the “more disruptive than expected” impact of demonetisation and the Goods and Services Tax were factors responsible for the projected decline in India’s economic growth.

On October 2, Fitch Ratings had reduced India’s projected growth for the 2017-’18 financial year to 6.9% from its earlier forecast of 7.4%.