The World Bank has slashed its growth forecast for India for the current financial year to 7.5 percent, a hefty 1.2 percentage points down from its previous forecast of 8.7 percent. Writing in its latest Global Economic Prospects report released, the World Bank said it cut India’s GDP growth forecast due to headwinds from rising inflation, supply chain disruptions, and geopolitical tensions.
Key points of the report:
- The bank sees India’s growth slowing further to 7.1 percent in FY24. This is 30 basis points higher than the previous forecast of 6.8 percent. For FY25, GDP growth has been pegged at 6.5 percent.
- One basis point is one-hundredth of a percentage point. While the downward revision in the growth forecast for FY23 is large, it remains higher than local projections.
- The Reserve Bank of India (RBI), for instance, has pegged GDP growth for FY23 at 7.2 percent. There is a chance this figure may be lowered on June 8 when the Monetary Policy Committee (MPC) announces its latest interest rate decision.
Important takeaways for all competitive exams:
- World Bank Headquarters: Washington, D.C., United States;
- World Bank Formation: July 1944;
- World Bank President: David Malpass.