After projecting India's growth to rebound to 7.2 per cent in 2017 and 7.7 per cent in 2018, in its recent report, International Monetary Fund (IMF) sees signs of recovery in the country’s economy post demonetization and has said that the impact of demonetization has abated and about 75 per cent of the cash has been replaced in the economy, it pointed that indicators such as index of industrial production (IIP) and the purchasing managers’ index (PMI) have also shown a nice recovery.
However, the global multilateral agency expressed the need of quick replacement of the defunct currency in order to restore missing transactions and support the peoples' spending capacity, as cash is an important element in the Indian economy. It further stated that in general it supports the Indian government's efforts to combat the illicit financial flows, and to produce the share of the informal economy.
IMF in their forecast, reflecting the temporary dislocation associated with the demonetisation scheme had lowered the growth target by almost a full percentage point compared to the October, owing about a half a per cent for growth this year and half a percent for growth next year.