S&P cuts India’s economic growth forecast to 7.3% for 2022-23
On Wednesday, S&P Global Ratings cut India’s growth projection for the current fiscal year to 7.3% from 7.8% earlier, due to rising inflation and the Russian-Ukrainian conflict. longer than expected.
In its global macroeconomic growth forecast update, S&P said inflation staying higher for a long time is a concern, forcing central banks to raise rates more than currently expected, risking a softer landing. difficult, including a greater impact on production and employment.
In December last year, S&P pegged India’s GDP growth at 7.8% for the 2022-23 financial year, which started on April 1, 2022.
The growth projection has been reduced to 7.3% for the current financial year. For the next fiscal year, growth has been set at 6.5%.
“Risks to our forecast have increased since our last forecast cycle and remain firmly tilted to the downside. defuse, in our view, pushing downside risks,” S&P said.
India’s economy is estimated to have recorded GDP growth of 8.9% in the last fiscal year (2021-22). S&P pegged CPI or retail inflation in the current fiscal year at 6.9%.
In the aftermath of the Russian-Ukrainian war and rising commodity prices, various global agencies have recently downgraded India’s growth forecasts.
In April, the World Bank cut India’s GDP forecast for FY 2022-23 to 8% from 8.7% previously forecast, while the IMF cut projections to 8.2% from 9% .
The Asian Development Bank (ADB) forecast India’s growth at 7.5%, while the RBI last month cut its forecast to 7.2% from 7.8% amid volatility crude oil prices and supply chain disruptions due to the ongoing Russian-Ukrainian war. .