World Bank: India’s FY23 GDP forecast

On June 7, 2021, the World Bank reduced its real gross domestic product (GDP) growth forecast for year 2022-23 for India from 8 per cent to 7.5 per cent in the “Global Economic Prospects Report”.

Key Findings of the report

  • This forecast was reduced after considering the supply-chain pressure, inflationary pressures, and geopolitical tensions because of Russia’s invasion of Ukraine.
  • In the report, World Bank also decreased its global growth forecast for year 2022 from 4.1 per cent to 2.9 per cent.
  • Growth is likely to slow down further to 7.1 percent in 2023-24.

World Bank on growth

According to the World Bank, growth in India will be supported by fixed investment undertaken by government and private sector. Government has already introduced incentives and reforms to improve the business climate.

Background

World Bank has revised its GDP growth forecast in FY23 for India, for the second time. In April 2022, forecast was lowered from 8.7 per cent to 8 per cent. Apart from World Bank, Rating agency S&P and International Monetary Fund also cut their FY23 forecast for India. World Bank’s forecast (7.5%) is still bullish than Reserve Bank of India’s (RBI’s) forecast of 7.2%.

Growth in last FY

In the financial year 2021-22, India’s economy grew by 8.7 per cent. Thus, it was the fastest-growing major economy worldwide. This growth was the result of agriculture sector and government final consumption expenditure.

Global Economic Prospects

It is a World Bank Group flagship report, which examines global economic prospects and developments. It specially focuses on emerging market and developing economies. The report is issued twice a year, in the month of January and June.

World Bank

It is an international financial institution, to provide loans and grants to the governments across low-income and middle-income countries, to launch capital projects. It was established at 1944 Bretton Woods Conference.

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