The Reserve Bank of India also slashed its forecast for real economic growth to 6.7% this fiscal year ending March, from its prediction of 7.3% in August.
The International Monetary Fund (IMF) raised Argentina's growth forecasts for 2017 and 2018 in the new report on the country's economy by Alejandro Werner, IMF's Western Hemisphere Department director.
In major economies, any negative economic impact from a gradual rise in long-term interest rates is expected to be offset by an easing of lending conditions.
The report was issued on the sidelines of the annual meetings of the International Monetary Fund and the World Bank, which started today and continues until October 15, and in which Egypt participates with a high-level delegation including Sahar Nasr, Minister of Investment, Amr al-Garhy, Minister of Finance and Tariq Amer, the CBE Governor.
But its latest forecast is marginally higher than the 1.6 per cent growth pencilled in by the Organisation for Economic Co-operation and Development for this year.
In its fiscal monitor report, the IMF dismissed arguments that raising tax would be bad for growth.
It notes the top income tax rates in OECD countries, like New Zealand, have decreased from around 62 percent in 1981 to 35 percent now.
According to IMF's Economic Counsellor, Maurice Obstfeld, "The global recovery is continuing, and at a faster pace".
"In addition, tax systems are less progressive than indicated by the statutory rates, because wealthy individuals have more access to tax relief", Gaspar said in the blog co-written with Mercedes Garcia-Escribano.
"In the rest of emerging market and developing Asia, growth is expected to be vigorous and marginally higher than in April 2017", it said.
The World Bank too scaled down India's economic growth expectations to 7% for the financial year ending March 2018, from a projection of 7.2% earlier.
But the IMF is sceptical politicians will heed its message.
"Many attempts have been made by political groups to derail the GST, but I am glad that their own State governments are not listening to them because they know 80% of the money is going to come to them so they don't have to appease an ill-informed central leader of the party and let the revenues of their own State suffer", he said at an event organised by the Confederation of Indian Industry (CII) and the U.S. -India Business Council (USIBC). The picture is very different from early last year, when the world economy faced faltering growth and financial market turbulence.
India's current potential workforce of 885 million will expand to 1.08 billion in two decades, the Deloitte report said.