The World Bank has slashed India’s economic growth forecast to 7.5 percent for the fiscal year 2022-23. The World Bank on Tuesday slashed India’s economic growth forecast for the current fiscal to 7.5 per cent, keeping in mind rising inflation, supply chain stagnation and geopolitical tensions.
This is the second time that the World Bank has revised its GDP growth forecast for India in the current fiscal year 2022-23 (April 2022 to March 2023). In April, the bank had lowered the forecast to 8 percent from 8.7 percent, after which it is now estimated to be 7.5 percent.
The World Bank Global Economic Prospects in the latest report said, “India is projected to slow down to 7.5 per cent growth in fiscal year 2022-23. These changes are in view of rising inflation, supply chain stagnation, reduced consumption of services from the pandemic and geopolitical tensions. The World Bank said growth would also be fueled by investments by the private sector and the government, which have introduced several reforms to improve the business environment.
Expected to be 7.1 per cent in 2023-24: The bank said this forecast reflects a 1.2 per cent decline in growth compared to January’s estimate. At the same time, the report also said that the growth is expected to slow further to 7.1 percent in 2023-24. According to the bank, India’s growth rate will slow further to 7.1 percent in the financial year 2023-24. However, this is 30 basis points higher than the previous estimate of 6.8 percent.
GDP growth 6.5 percent in 2025: At the same time, GDP growth for the financial year 2024-25 has been estimated at 6.5 percent. A base point is one hundredth of a percentage point. However, this figure of decline in the growth forecast for the financial year 2022-23 is higher than the local estimates. The Reserve Bank of India (RBI) has pegged GDP growth at 7.2 per cent for the financial year 2022-23. However, this figure may drop further on June 8 when the Monetary Policy Committee (MPC) announces its latest interest rate.