The World Bank has downgraded the Indian economy’s growth forecast as sharp falls in the country’s automobile and real estate sales flagged the short-term impact of recalling India’s two most-used bank notes. The Washington-based financial institution predicted India’s economy would grow by a “still robust” 7% in the fiscal year to March 2017 – a 0.6% drop from its earlier forecast but still the fastest rate of any major economy in the world. Demonetisation has suffocated the vast informal economy, which employs up to 80% of Indians, but the World Bank said the impact of the policy was likely to be short term. Sales fell by 44% across eight major Indian cities between October and December 2016, compared with the same period in 2015, the report said. Jaitley said the rupee recall was “a major step toward integration of [the] informal economy with the more formal economy”.
Source: The Guardian January 11, 2017 13:10 UTC