Dire forecasts for Indian economy
In a damning take on the state of the economy in India, the World Bank has pared back its real gross domestic product (GDP) growth forecast for financial year (FY) 2022-23 from 7.5 per cent to 6.5 per cent.
This isn’t the World Bank’s first such prediction for India for FY23, though; it is the third. In April, the GDP growth forecast was cut back from 8.7 per cent to 8 per cent, and then in June, it was further cut back to 7.5 per cent. And now, this.
The institution has also warned of spillover effects on the economy from Russia’s invasion of Ukraine and the looming global monetary tightening policies (that is, raising of interest rates) by central banks (to control inflation). The International Monetary Fund Managing Director Kristalina Georgieva warned on Thursday that the monetary tightening policies will lead to a global recession, whose primary effects will be falling income, rising prices and huge job losses.
In its biannual report on South Asia, the Bank said, ‘Private investment growth is likely to be dampened by heightened uncertainty and higher financing costs.’
The Reserve Bank of India (RBI), India’s central bank, too had warned of slowing of economic growth. In April, it cut GDP growth prediction for FY23 from 7.8 per cent to 7.2per cent and later, further down to 7 per cent.
The United Nations Conference on Trade and Development’s (UNCTAD) ‘Trade and Development Report 2022’ said India’s economic growth (GDP growth) will decelerate sharply from the 8.2 per cent in FY21 to 5.7 per cent in FY22, and further down to 4.7 per cent in FY23. FY21 had seen a growth expansion to 8.2 per cent in India, the strongest among G20 countries, according to the report.
