NEW DELHI: The RBI on Wednesday cut the economic growth forecast for the current fiscal to 6.7 per cent from earlier projections of 7.3 per cent.

The cyclical slowdown that set in at the beginning of 2016-17 pulled the growth down to 5.6 per cent in the first quarter.

However, the projections show a positive trend in the subsequent quarters with the growth rate pegged at 6.4% in Q2, 7.1% in Q3 in and 7.7% in Q4 respectively.

"The Real GVA (gross value added) growth is projected at 6.7 per cent for 2017-18 - 6.4 per cent in Q2, 7.1 per cent in Q3 and 7.7 per cent in Q4 - with risks evenly balanced around this baseline path," RBI said in its fourth policy review of 2017-18.

The firms too expect a significant improvement in business sentiment in third quarter, said the Resolution of the six-member Monetary Policy Committee ( MPC ) put up by the central bank on its website.

The MPC said structural reforms introduced in the recent period will likely be growth augmenting over the medium-to long-term by improving the business environment, enhancing transparency and increasing formalisation of the economy.

(With inputs from PTI)

