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United Nations: India’s economic growth projected to decelerate to 6% in 2023 from 6.6% in 2022

United Nations: India's economic growth projected to decelerate to 6% in 2023 from 6.6% in 2022_40.1

As per the latest Trade and Development Report Update released by the United Nations Trade and Development Conference (UNCTAD), India’s economic growth is expected to slow down from 6.6% in 2022 to 6% in 2023. The report also predicts a decline in global growth in 2023 to 2.1% from the previously projected 2.2% in September 2022. However, this projection is based on the assumption that the adverse impact of higher interest rates on the financial sector is limited to the first quarter’s bank runs and bailouts.

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According to the report, India’s economic growth rate was 6.6% in 2022, and it lost its top position among G20 countries to Saudi Arabia, which has a higher growth rate of 8.6% due to its oil-rich economy. Although India’s export orders are increasing, its GDP growth rate is expected to slow down to 6.0% in 2023 as the current government spending is declining.

In 2022, South Asia witnessed a growth rate of 5.7%. However, despite the growth, the poverty rates in the region have continued to rise. UNCTAD predicts that the region will maintain a fast pace of growth at 5.1% in 2023, primarily due to the expansion of its biggest economy, India.

The region’s heavy reliance on fossil fuel imports from outside the region makes it susceptible to inflationary pressures, which could lead to increased monetary tightening measures. Furthermore, budgetary constraints may result in reduced public spending.

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United Nations: India's economic growth projected to decelerate to 6% in 2023 from 6.6% in 2022_50.1

United Nations: India's economic growth projected to decelerate to 6% in 2023 from 6.6% in 2022_60.1

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