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3 percent. India’s tempered growth projection to 7.0 percent from the previously forecasted 7.4 percent in 2016 is due to weak investments, a slowdown in the country’s agriculture sector, and the lack of available cash due to the government’s decision to ban high-denomination banknotes. This will likely affect largely cash-based sectors in the country including small- and medium-scale businesses.
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The effects of the transition are expected to be short-lived and the Indian economy is expected to grow at 7.8 percent in 2017. The forecast in East Asia is maintained for 2016 and 2017. Growth this year will reach 5.8 percent, with a slight moderation to 5.
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6 percent in 2017. Growth in the People’s Republic of China (PRC) — the world’s second largest economy — is expected to hit 6.6% this year, driven by strong domestic consumption, solid wage growth, urban job creation, and public infrastructure investment. The forecast for the PRC in 2017 is maintained at 6.4 percent. In Southeast Asia, growth forecasts remain unchanged at 4.5 percent in 2016 and 4.6 percent in 2017, with Malaysia and the Philippines expecting stronger growth due to a surge in domestic consumption and public and private investment, compared to lower growth forecasts in Brunei Darussalam, Myanmar, and Singapore. The outlook in Central Asia is maintained at 1.5 percent in 2016 and 2.6 percent in 2017, as the ongoing recession in the Russian Federation and low global commodity prices for oil and natural gas continue to dampen growth in the subregion. The Pacific will see growth of 2.7 percent in 2016, picking up to 3.3 percent in 2017. The fiscal contraction in Papua New Guinea — the Pacific’s largest economy — and recovery from recent cyclones have weighed on growth in the subregion. While cyclone damage in Fiji has had a bigger impact on its growth outlook than previously envisaged, prospects for Samoa, Kiribati, and Tuvalu are improving through improvements in fisheries, infrastructure, and tourism.