The Asian Development Bank on Wednesday lowered India’s economic growth forecast for the financial year 2021-’22 to 7% from its previous estimate of 7.2% in July.

The funding agency cited the global economic condition, elevated inflation and tighter monetary policy as the reasons for the latest outlook.

“Elevated oil and commodity prices and high inflation will likely require the continued tightening of monetary policy to ensure that inflation expectations do not get entrenched,” the Asian Development Bank said. “Weaker than expected global demand over the next 2 years will also adversely affect exports and growth.”

The bank, in its Asia Development Outlook report, also said that inflation could remain at 6.7% in 2022-’23.

Retail inflation in India has remained above the upper limit mandated by the Reserve Bank of India for eight months. The central bank aims to keep inflation in the range of 2% to 6%.

On August 5, the Reserve Bank of India said that inflation is expected to remain above its 6% threshold in the second and third quarters of this financial year.

Last week, Fitch Ratings also slashed India’s economic growth forecast for the current financial year to 7% from its estimate of 7.8% made in June.

On September 1, global rating agency Moody mentioned that the Reserve Bank of India could maintain a reasonably tight policy stance in 2023 to prevent domestic inflationary pressures from building further.

The rating agency had cut down India’s economic growth for the current fiscal to 7.7% from its previous estimate of 8.8% in May. It also lowered India’s growth forecast for 2023 to 5.2% from 5.4%.