World Bank cuts GDP growth Forecast to 6.5%

New Delhi: The World Bank slashed India’s GDP growth forecast for 2022-23 to 6.5% from its earlier estimate of 7.5%, amidst the impact of the ongoing war in Ukraine, leading to a rise in global interest rates and high inflation.

“Economic growth in India will slow in FY23, as the Country is coming off a strong recovery in FY22. The spillovers from the Ukraine war and global monetary policy tightening will continue to weigh on India’s economic outlook. Elevated inflation on the back of higher prices of key commodities and rising borrowing costs will affect domestic demand, particularly private consumption in FY24 while slowing global growth will inhibit growth in demand for India’s export,” the World Bank said.

It also added, “Private investment growth is likely to be dampened by heightened uncertainty and higher financing costs. The ongoing simplification of various business regulations will help ease the transition by creating new jobs and facilitating business transactions.”