Indian economy's growth is projected to slow to 6.9 per cent in FY23, 0.6 percentage points lower than what had been estimated in June, the World Bank said Wednesday in its recent report.
The slowdown in the global economy and rising uncertainty will weigh on export and investment growth. However, it highlighted that India will remain the fastest-growing economy of the seven largest EMDEs.
"Growth in India is projected to slow from 8.7% in FY2021/22 to 6.9% in FY2022/23, the latter revised 0.6 percentage points lower since June. The slowdown in the global economy and rising uncertainty will weigh on export and investment growth," World Bank said in its latest report "Global Economic Prospects".
"Governments increased infrastructure spending and various business facilitation measures, however, will crowd in private investment and support the expansion of manufacturing capacity," it added.
Meanwhile, the World Bank further added that the GDP growth will slow to 6.6 per cent in FY24 before falling back toward its potential rate of just above 6 per cent.
Global growth is slowing sharply in the face of elevated inflation, higher interest rates, reduced investment, and disruptions caused by Russia’s invasion of Ukraine said World Bank.
It further added that any new adverse development—such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the Covid-19 pandemic, or escalating geopolitical tensions—could push the global economy into recession. This would mark the first time in more than 80 years that two global recessions have occurred within the same decade.
"The global economy is projected to grow by 1.7% in 2023 and 2.7% in 2024. The sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95% of advanced economies and nearly 70% of emerging market and developing economies," World Bank added.