The International Monetary Fund on Tuesday slashed India’s economic growth forecast for the financial year 2022-’23 to 8.2% from its January estimate of 9%. The economic body said that Russia’s invasion of Ukraine has resulted in uncertainty in the global economic outlook.
“Notable downgrades to the 2022 forecast include Japan [0.9 percentage point] and India [0.8 percentage points], reflecting in part weaker domestic demand – as higher oil prices are expected to weigh on private consumption and investment – and a drag from lower net exports,” the International Monetary Fund said in its World Economic Report.
In its October report, the global body had projected India’s growth at 8.5% for 2022-’23.
India’s growth forecast was, however, better than advanced economies such as the United States and China.
The US economy is projected to grow at 3.7% in for 2022-’23 and 2.3% in 2023-’24. China, which had registered a growth rate of 8.1% in 2021, is projected to grow at 4.4% in 2022-’23 and at 5.1% in 2023-’24.
The international body also revised the global economic growth for 2022-’23 to 3.6% from 4.4% projected earlier.
“The downgrade largely reflects the war’s direct impacts on Russia and Ukraine and global spillovers,” it added.
On April 13, the World Bank had also lowered India’s growth forecast for fiscal year 2022-’23 to 8% from its previous estimate of 8.7% made in January.
The financial body had also cited the impact on the global economy of Russia’s invasion of Ukraine as the reason behind the revision.
“In India, household consumption will be constrained by the incomplete recovery of the labour market and inflationary pressures,” the World Bank had said in its bi-annual report for the South Asian region.