World Bank cuts India’s GDP forecast to 6.5%, but there’s positive news too

The World Bank on Thursday cut India’s GDP or gross domestic product to 6.5% for fiscal year 2022-23, from a previous estimate of 7.5%. In the previous year, the Indian economy grew by 8.7%.

In its South Asia Economic Focus report released Thursday, the World Bank said: “The spillovers from the Russia-Ukraine war and the tightening of global monetary policy will continue to weigh on India’s economic prospects.”

However, the World Bank said India is recovering more strongly than the rest of the world.

“The Indian economy has performed well compared to the other countries in South Asia, with a relatively strong growth performance… recovering from the sharp contraction during the first phase of Covid,” said Hans Timmer, World Bank’s chief economist for South Asia. , PTI news agency.

Timmer added that the Indian economy has performed particularly well in the services sector and especially in service exports.

“But we have lowered our forecast for the fiscal year that has just started, largely because the international environment is deteriorating for India and for all countries. We are seeing a sort of tipping point in the middle of this year and the first signs of slowing down across the board. world,” said the top World Bank official.

This is the third time the World Bank has revised its GDP growth forecast for India in FY23. By June, it had lowered its forecast to 7.5%. Earlier in April, it had lowered the forecast from 8.7% to 8%.

Recently, the Reserve Bank of India (RBI) lowered its economic growth forecast for the current fiscal year to 7% from its previously forecast 7.2% amid ongoing geopolitical tensions and aggressive monetary policy tightening worldwide.

(With input from the agency)

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