The International Monetary Fund (IMF) on April 19 lowered India’s FY23 economic growth forecast to 8.2 percent from 9 percent estimated in January, highlighting the impact of surging crude oil prices on consumer demand and private investments.
As reported by Mint, the 0.8 percentage point cut in India’s gross domestic product (GDP) forecast for FY23 is sharper than the 0.5 points estimated in the case of major emerging and developing Asian economies and 0.4 points for China.
Nevertheless, India is projected to remain the world’s fastest-growing major economy, with China’s GDP growth estimated to slow to 4.4 percent in 2022 from 8.1 percent in 2021.
IMF also cut India’s FY24 growth forecast to 6.9 percent from 7.2 percent estimated earlier. Besides, it expects India’s inflation to average 6.1 percent in FY23 and ease to 4.8 percent in FY24.
IMF also trimmed the global growth forecast for 2022 and 2023 by 0.8 percentage points and 0.2 points, respectively, to 3.6 percent. “The downgrade largely reflects the war’s direct impacts on Russia and Ukraine and global spillovers,” Mint quoted IMF's report.
Many rating agencies and global institutions have slashed India's FY23 growth forecast owing to soaring inflation led by the Ukraine war.
The World Bank on April 13 lowered India’s economic growth forecast for the financial year 2022-23 to 8 percent from 8.7 percent estimated in January.
RBI has projected real GDP growth for the financial year 2022-23 at 7.2 percent assuming crude oil (Indian basket) at US$ 100 per barrel during 2022-23.
Morgan Stanely sees India's FY23 growth at 7.9 percent while ADB sees the Indian economy growing at 7.5 percent in FY23.
Fitch Ratings has cut India's FY23 GDP growth to 8.5 percent from 10.3 percent earlier while ICRA has also lowered India's FY23 growth forecast to 7.2 percent from 8 percent.
India Ratings (Ind-Ra) has cut India's FY23 growth forecast to 7-7.2 percent from 7.6 percent.