In its Global Macro Update for Growth Forecast, S&P said inflation is a matter of concern for the long term to remain high, which would require central banks to raise rates higher than currently set, risking a hard landing with a larger impact on output and employment.
S&P had projected India’s GDP growth in FY 2022-23 in December last year, starting April 1, 2022, at 7.8 percent.
The growth forecast for the current financial year has been brought down to 7.3 percent. In the next financial year, the growth has been estimated at 8.5 percent.
“Our forecast risks have been selected from our last forecast round and remain firmly on the negative side. The Russia-Ukraine conflict could drag on and escalate further than before, and in our view, the risks are more likely to be negative,” the S&P said.
The Indian economy is projected to grow by 8.9 per cent in the last fiscal (2021-22).
S&P has set a CPI of 6.9 per cent for the current financial year.
Following the Russia-Ukraine war and rising commodity prices, various global organizations have recently downgraded India’s growth forecast.
The World Bank cut India’s GDP forecast for fiscal year 2022-23 from 8.7 percent to 8 percent in April, while the IMF cut its estimates from 9 percent to 8.2 percent.
The Asian Development Bank (ADB) has projected India’s growth at 7.5 percent, while the RBI last month lowered its forecast for 7.2 percent to 7.2 percent amid volatile crude oil prices and disruption in the supply chain due to the Russia-Ukraine war. .