The World Bank on Tuesday lowered the estimate of India’s growth rate for the financial year 2023-’24 to 6.3%, from its projection of 6.6% in January.

The World Bank numbers mark a significant dip from the 7% growth rate predicted by the Union government for the previous financial year of 2022-’23.

The decline in India’s growth rate was a result of spillover effect from other economies, slower consumption growth and tightening of monetary policy by the Reserve Bank of India, the World Bank said on Tuesday in its India Development Update report.

Since May last year, the RBI has increasingly tightened its monetary policy by raising the repo rate on six occasions. The repo rate is the interest rate at which the central bank lends money to commercial banks.

The World Bank report also noted that the India’s overall consumption is expected to be constrained by rising borrowing costs, slower income growth and continued fiscal consolidation.

Fiscal Consolidation refers to the policies undertaken by government to reduce deficits and accumulation of debt stock.

Meanwhile, the World Bank report predicted some relief on the price rise front, as it pegged inflation to cool down to 5.2% in the current financial year from 6.6% in the previous year.

“The key factors driving down inflation will be moderating global oil prices, lower food prices and easing core inflation,” the World Bank noted.