Winning Bizness Desk
Mumbai. The World Bank has reduced India's GDP growth forecast to 7.5 percent for the current financial year. The World Bank has cut its previous estimate by 1.2 percent. Earlier, this apex bank had estimated India's growth at 8.7 percent. Currently, these cuts have been made due to rising inflation, supply chain constraints and geopolitical tensions. The World Bank thinks that even in the financial year 2024, India's growth can be at the rate of 7.1 percent. However, this is 30 basis points higher than the bank's previous estimate of 6.8 per cent. India's GDP growth for the financial year 2025 has been estimated at 6.5 percent.
How RBI will react ?
The downside revision in the growth forecast for FY 2023 is huge. This is higher than the local estimates. The Reserve Bank of India (RBI) has pegged the GDP growth at 7.2 percent for the financial year 2023. However, on the last day of the meeting of RBI's Monetary Policy Committee on June 8, an important decision can be taken on the new interest rates. The forecast of economic growth may also be revised.
World economy "in danger again"
The World Bank has not changed its outlook only on India. He has said that at this time the economy of the whole world is "in danger again". The World Bank has said, "After the losses in the aftermath of the Covid-19 pandemic, Russia's invasion of Ukraine further slowed the slowdown of the global economy, the period it is now entering." May be prolonged due to weak growth and high inflation.
The World Bank has further said, “Even if a global recession is averted, the pain of inflation could last for many years, until a sharp resurgence in key supply… low and medium-income economies may face potentially volatile results from several years of above-average inflation and below-average growth."