World Bank Slashes India’s GDP Growth Forecast To 7.5% For 2022-23 Amid Rising Inflation

Washington: The World Bank on Tuesday slashed India’s economic growth forecast for the current fiscal to 7.5 per cent amid rising inflation, supply chain disruptions and geopolitical tensions taper recovery. Notably, the World Bank for the second time has revised its GDP growth forecast for India in the current fiscal 2022-23 (April 2022 to March 2023).Also Read – HDFC Bank Customers Alert! EMIs To Go Up As Bank Raises Key Interest Rate Ahead of RBI MPC Meeting

The World Bank had in April reduced the GDP forecast from 8.7 per cent to 8 per cent and now it is projected at 7.5 per cent. The GDP growth compares to an 8.7 per cent expansion in the previous 2021-22 fiscal. Also Read – Will Mahatma Gandhi’s Face Be Replaced On Bank Notes? RBI Issues Clarification

“In India, growth is forecast to edge down to 7.5 percent 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. Also Read – Another RBI Rate Hike Coming? Check What Experts Say Ahead Of MPC Meeting

The World Bank said growth will also be supported by fixed investment undertaken by the private sector and by the government, which has introduced incentives and reforms to improve the business climate. This forecast reflects a 1.2 percentage point downward revision of growth from the January projection, the bank added.

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

Before World Bank’s projection, global rating agencies too had slashed India’s economic growth forecast. Last month, Moody’s Investors Service trimmed the GDP projection to 8.8 per cent for the calendar year 2022 from 9.1 per cent earlier, citing high inflation.

S&P Global Ratings too had cut India’s growth projection for 2022-23 to 7.3 per cent, from 7.8 per cent earlier, on rising inflation and longer-than-expected Russia-Ukraine conflict.

In March, Fitch had cut India’s growth forecast to 8.5 per cent, from 10.3 per cent, while IMF has lowered the projection to 8.2 per cent from 9 per cent.

Asian Development Bank (ADB) has pegged India’s growth at 7.5 per cent, while RBI in April cut the forecast to 7.2 per cent from 7.8 per cent amid volatile crude oil prices and supply chain disruptions due to the ongoing Russia-Ukraine war.

World Bank President David Malpass, in his foreword to the report, said after multiple crises, long-term prosperity will depend on returning to faster growth and a more stable, rules-based policy environment.

(With inputs from PTI)

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