World Bank’s GDP projection for India

October 7, 2022

The World Bank had recently downgraded India’s real GDP growth forecast for the Financial Year 2023 (2022-23).

Key facts

In its latest South Asia Economic Focus Update, the World Bank had slashed India’s real GDP growth forecast from the earlier estimate of 7.5 per cent to 6.5 per cent.
It warned that the Indian economy will be adversely impacted by the Russia-Ukraine war and the tightening of global monetary policy.
Private investments are expected to decline because of uncertainties and high cost.
India’s export will be adversely impacted because of the fall in global demand.
The country’s export ban on broken rice is expected to affect one-fifth of its rice export, which could result in creating global supply chain concerns and allowing rival exporters like Thailand and Vietnam to increase prices, further aggravating the global food inflation.
India will also witness an increase in prices of key commodities and high borrowing costs, which will adversely affect the domestic demand, especially the private consumption.
This is the third time that the World Bank has revised the GDP growth estimation for India for the FY2023.
In April 2022, it slashed the GDP growth forecast from 8.7 per cent to 8 per cent. In June, it was downgraded yet again to 7.5 per cent.
The recent estimate by the World Bank is the lowest any multilateral agency predicted for FY2023.
The International Monetary Fund (IMF) had predicted India’s GDP to grow at 7.4 per cent. It is expected to revise again in the near future.
RBI had slashed the GDP projection from 7.2 percent to 7 per cent. In April, the central bank downgraded the projection from 7.8 per cent to 7.2 per cent.
During the first quarter of FY 2023, India’s real GDP growth was 13.5 per cent – 3.8 per cent increase from the pre-pandemic level. This was caused by the increase in investment demand and private consumption.

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