World Bank Cuts India's GDP Growth Forecast To 7.5% For 2022-23 Fiscal
India Economic Growth: This is the second time that the World Bank has revised its GDP growth forecast for India.
Citing rising inflation, supply chain disruptions and geopolitical tensions, the World Bank on Tuesday cut India's economic growth forecast for the 2022-23 fiscal to 7.5 per cent. This is the second time that the World Bank has revised its GDP growth forecast for India after trimming it from 8.7 per cent to 8 per cent in April, PTI reported.
"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.
"Growth is expected to slow further to 7.1 percent in 2023-24 back towards its longer-run potential," the report noted.
WPI or wholesale price-based inflation stood at a record high of 15.08 per cent in April and retail inflation mounted to an eight-year high of 7.79 per cent following a rise in prices across all items from fuel to vegetables and cooking oil.
High inflation prompted the Reserve Bank to hold an unscheduled meeting to raise the benchmark interest rate by 40 basis points to 4.40 per cent last month.
According to government data, India's GDP grew by 4.1 per cent in the fourth quarter (Q4) of FY22, pushing the annual growth rate to 8.7 per cent. However, growth in the January-March period was slower than the 5.4 per cent expansion in the previous October-December quarter of 2021-22.
According to the data released the National Statistical Office (NSO), the economy expanded by 8.7 per cent in FY22 against a 6.6 per cent contraction in FY21.
Last month, several global rating agencies like Fitch and IMF, had slashed India's economic growth forecast. 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 the protracted 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.
(With PTI inputs)
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