Manila– The Asian Development Bank on Tuesday lowered India’s growth forecast for this year from 7.4 per cent to 7 per cent due to a slight slowdown in the economy following the central government’s demonetisation move.

The Manila-headquartered ADB’s review said the shortage of cash after the demonetisation of Rs 1,000 and 500 notes was one of the reasons for the decline in India’s economic growth in 2016, Xinhua news agency reported.

ADB highlighted weak investments and slow down in the agricultural sector in the country among other reasons for the fall, Efe news cited the report as saying.

However, the report said Indian economy will recover next year with an estimated growth of 7.8 per cent.

For the Asian continent, the ADB forecast growth from 5.7 to 5.6 per cent, and said the growth for 2017 would remain unchanged at 5.7 per cent.

The growth is expected to remain stable in the coming year, ADB Deputy Chief Economist Juzhong Zhuang said.

“Asian economies continue their robust expansion in the face of global economic uncertainties,” said Zhuang.

“Structural reforms to boost productivity, improving investment climate and supporting domestic demand can help maintain growth momentum,” he added.

“Growth in China, the world’s second largest economy, is expected to hit 6.6 per cent this year, driven by strong domestic consumption, solid wage growth, urban job creation, and public infrastructure investment,” the report said.

The bank’s forecast for China in 2017 was maintained at 6.4 per cent. (IANS)