World Bank downgrades India’s economic growth forecast to 6.5 pc for FY23

The World Bank on Thursday forecast India’s economic growth rate for the 2022-2023 fiscal year at 6.5 percent, down one percent from its previous projection of June 2022, citing a deteriorating international environment.

However, in its latest South Asia Economic Focus released ahead of the annual meeting of the International Monetary Fund and the World Bank, the bank noted that India is recovering stronger than the rest of the world. India’s economy grew by 8.7 percent in the previous year.

“India’s economy has performed well compared to other countries in South Asia, with relatively strong growth … rebounding from a sharp downturn during the first phase of Covid,” said Hans Timmer, the World Bank’s chief economist for South Asia. PTI in an interview.

According to him, India is doing relatively well with the advantage that it does not have a large external debt, there are no problems coming from that side and there is a prudent monetary policy, he noted.

The Indian economy has performed particularly well in the services sector and especially in service exports.

“But we have lowered the forecast for the fiscal year that has just started, largely because the international environment is deteriorating for India and for all countries. We see a kind of inflection point in the middle of this year and the first signs of a slowdown around the world,” he said.

According to him, the second half of the calendar year is weak in many countries and will be relatively weak in India as well.