S&P Cuts FY23 India Growth Forecast To 7.3% On Inflation.
S&P cuts FY23 India growth forecast to 7.3% on inflation.
Due to rising inflation and the longer-than-expected Russia-Ukraine conflict, India’s growth projection for the current fiscal has been cut to 7.3 percent from 7.8 percent earlier, said S&P Global Ratings in its Global Macro Update to Growth Forecasts.
Inflation remaining higher for long is a worry, which requires central banks to raise rates more than what is currently priced in, risking a harder landing, including a larger hit to output and employment.
The Russia-Ukraine conflict is more likely to drag on and escalate than end earlier and de-escalate, pushing the risks to the downside, said S&P, as per a report.
Indian economy is estimated to have clocked a GDP growth of 8.9 percent in the last fiscal (2021-22).S&P pegged CPI or retail inflation in the current fiscal at 6.9 percent.
In the aftermath of the Russia-Ukraine war and rising commodity prices, various global agencies have cut India’s growth forecast recently.
The World Bank in April slashed India’s GDP forecast for fiscal 2022-23 to 8 percent from 8.7 percent predicted earlier, while IMF has cut the projections to 8.2 percent from 9 percent.
Asian Development Bank (ADB) has projected India’s growth at 7.5 percent, while the RBI, last month, cut its forecast to 7.2 percent from 7.8 percent amid volatile crude oil prices and supply chain disruptions due to the ongoing Russia-Ukraine war.
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