Global financial services company UBS has reduced India’s economic growth forecast for 2022-23. UBS has slashed India’s GDP growth estimate by 70 basis points (0.7 per cent) to 7 per cent. UBS cited slowing global growth on the back of higher commodity prices, weak local demand due to energy price hikes, rising inflationary pressures and a challenging labor market.
A week ago, the World Bank has reduced the growth forecast
A week before UBS downgraded the forecast, the World Bank also downgraded the economic growth forecast for India and across South Asia. The World Bank cited the Ukraine Crisis with risks associated with weak supplies, rising inflation. “We believe higher global commodity prices will impact the purchasing power of individuals in the real economy and margins of companies,” UBS economist Tanvi Gupta said in a note.
Also read- After retail, now there will be a clash between Ambani-Bezos for IPL, understand the whole matter
Reserve Bank cuts economic growth estimate to 7.2%
India meets about 80 per cent of its oil requirements through imports. Rising crude oil prices have increased the country’s trade and current account deficit. Also, this is hurting the rupee and imported inflation is picking up. Earlier this month, the Reserve Bank of India raised its inflation forecast for the current financial year to 5.7 per cent, up 120 basis points from the February forecast. Also, it has reduced its economic growth estimate from 7.8 per cent to 7.2 per cent.
Also read- LIC IPO: Government alert after Ukraine crisis, now plans to raise 30 thousand crores