World Bank Further Lowers India’s Economic Growth Forecast For FY23

Bhubaneswar: Revising the GDP growth forecast for India for the second time in the current fiscal, the Work Bank on Tuesday slashed it to 7.5%, citing rising inflation, supply chain disruptions and geopolitical tensions.

In April, it had trimmed the growth forecast from 8.7% to 8%.

“In India, growth is forecast to edge down to 7.5% in the fiscal year 2022/23, with headwinds from rising inflation, supply chain disruptions, and geopolitical tensions offsetting buoyancy in the recovery of services consumption from the pandemic,” the World Bank said in its latest issue of the Global Economic Prospects.

This forecast reflects a 1.2 percentage point downward revision of growth from the January projection, the bank said.

“Growth is expected to slow further to 7.1% in 2023-24 back towards its longer-run potential,” it added.

The World Bank has also slashed global growth to 2.9% in 2022 while attributing the steep slowdown to Russia’s invasion of Ukraine and its effects on commodity markets, supply chains, inflation, and financial conditions.

Earlier, global rating agencies too had slashed India’s economic growth forecast with Moody’s Investors Service trimming the GDP projection to 8.8 per cent for the calendar year 2022 from 9.1 per cent earlier, citing high inflation, last month.

Last month, the Reserve Bank too held an unscheduled meeting to raise the benchmark interest rate by 40 basis points to 4.40% and another hike is expected on Wednesday.