India's Economic Growth Forecast Lowered To 6.5% This Year By World Bank

The International Monetary Fund also lowered its projections for global economic growth in 2023, showing world economic growth lower by USD 4 trillion through 2026.

India's Economic Growth Forecast Lowered To 6.5% This Year By World Bank
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The World Bank lowered its projections for India's economic growth rate to 6.5 per cent for fiscal year 2022-23 amid deteriorating international situation. However, a top official noted that the Indian economy is recovering stronger than the rest of the world. In its latest projection, there was a drop of one per cent from the previous growth rate of June 2022.

Meanwhile, the International Monetary Fund (IMF) also lowered its projections for global economic growth in 2023, showing world economic growth lower by USD 4 trillion through 2026. Kristalina Georgieva, managing director of the IMF, warned that “things are more likely to get worse before it gets better”.

She said the institution downgraded its global growth projections thrice already, to 3.2 per cent for 2022 and 2.9 per cent for 2023.

India, however, has managed to do better than other countries, according to the World Bank's latest 'South Asia Economic Focus' released ahead of the annual meeting with the International Monetary Fund. The Indian economy rose by 8.7 per cent in the previous year.

"The Indian economy has done well compared to the other countries in South Asia, with relatively strong growth performance... bounced back from the sharp contraction during the first phase of COVID," news agency PTI quoted as saying Hans Timmer, World Bank Chief Economist for South Asia.

According to Timmer, India has an advantage as it does not have a large external debt, which he termed a "prudent monetary policy". The Indian economy has done especially well in the services sector and especially service exports.

"But we have downgraded the forecast for the fiscal year that just started and that is largely because the international environment is deteriorating for India and for all countries. We see kind of an inflection point in the middle of this year, and first signs of slowing across the world," he said.

The second half of the calendar year is going to be weak in many countries and relatively weak in India too. Listing two factors behind it, Timmer said one is the slowing of growth in the real economy of high-income countries and the other one is the global tightening of monetary policy.

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