S&P lowers India’s growth forecast for FY23 to 7.3%

With rising inflation and the expected Russia-Ukraine conflict, the S&P Global Rating on Wednesday lowered India’s growth forecast for the current fiscal year from the previously estimated 7.8% to 7.3%.

In December 2021, S&P projected India’s GDP growth for FY23 at 7.8%. In the next financial year, the growth has been estimated at 8.5 percent. The Indian economy is projected to grow at 8.9% GDP for FY22

“Our forecast risk has increased since our last forecast round and is firmly on the downside. The Russia-Ukraine conflict is more likely to drag on and escalate than ever before, and in our view, the risks are negative, “S&P said in its global macro update forecast for growth.

S&P has set a CPI of 6.9% for the current financial year. It said it was a matter of concern that inflation would remain high for a long time, forcing central banks to raise rates higher than currently set, risking a difficult landing, including a major blow to output and employment.

In April, the World Bank lowered India’s GDP forecast for FY23 from 8.7% to 8%, as previously forecast, while the International Monetary Fund (IMF) cut its forecast from 9% to 8.2%.

The Asian Development Bank (ADB) has projected India’s growth at 7.5%, with the Reserve Bank of India lowering its forecast of 7.2% from 7.8% last month amid rising crude oil prices and supply chain disruptions due to the ongoing Russia-Ukraine crisis. War