The World Bank reduced its FY23 growth forecast for India to 6.5% from 7.5% in June, the most pessimistic prognosis for the country by any major institution, as it warned of a “deteriorating external environment.” For FY24, it has trimmed the growth forecast by 10 basis points to 6.5%.
“In the face of slowing global economy, (India’s) export growth will decelerate, while import growth would be supported by rebounding domestic demand,” the bank said in its most recent South Asia Economic Focus report. Despite this, India will continue to be the world’s fastest-growing major economy. The global organization has also recognized India’s relatively robust macroeconomic fundamentals.
With this, the bank joins a number of institutions that have cut down their India projections following the release of June quarter GDP data. Fitch recently reduced the country’s FY23 projection to 7% from 7.8%. Moody’s reduced its CY22 forecast to 7.7% from 8.8%. Goldman Sachs has reduced its 2022 growth forecast for India to 7% from 7.6%; the forecast for the fiscal year (FY23) has also been reduced to 7% from 7.2% previously.
Citigroup has reduced its FY23 growth forecast from 8% to 6.7%. The Reserve Bank of India (RBI) reduced its fiscal year prediction to 7% from 7.2% earlier this month. The International Monetary Fund is also projected to decrease its FY23 projections for India from 7.4% to 6.4% later this month, amid widespread expectations that it will significantly lower its forecasts for advanced economies.