NEW DELHI: India’s economic growth prospects may continue to feel the heat of Ukraine-Russia tensions and its aftermath as more and more analysts keep revising downward India’s GDP growth forecast in 2022-23.
In its latest report, rating agency India Ratings has revised its 2022-23 India GDP growth rate from 7.6% to 7-7.2%. It says that its earlier outlook (released in January) no longer holds on the back of the Ukraine-Russia conflict.
The rating agency says if the crude oil price is assumed to be elevated for three months then GDP growth could be 7.2% but if crude prices remain high for another six months, the GDP growth may come down to 7%.
It sees retail inflation going up by 100-140 basis points in 202-23 due to higher crude oil and edible oil prices impacting consumption demand. “A 10% y-o-y increase in petroleum product prices without factoring in currency depreciation is expected to push up Consumer Price Index inflation by 42 basis points and Wholesale Price Index inflation by 104 basis points,” India Ratings says in its latest economic outlook report.
Another rating agency ICRA recently drastically revised the GDP growth rate from 8% to 7.2% as it feels higher prices of fuels and items such as edible oils are likely to compress disposable incomes in the mid to lower-income segments, constraining the demand revival in 2022-23. Recently, rating agency Moody’s also cut the GDP growth estimate by 40 bps to 9.1% from 9.5% in 2022.