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World Bank lowers its forecast for economic growth in 2023 due to the impact of inflation

The World Bank has cut India’s economic growth forecast for the current fiscal year to 7.5 percent. Earlier, it forecast India’s economic growth rate of 8.7% in 2022-23. The World Bank said in its Global Economic Prospects – Global Economic Prospects report on Tuesday that it forecast India’s growth rate in light of challenges posed by rising inflationary pressures, supply chain constraints and geopolitical tensions.

The World Bank estimates that India’s growth rate could reach 7.1% in the 2023-24 fiscal year as well. This is 0.30 percent higher than previous estimates. The previous estimate was 6.8 percent. The report estimates that in 2024-25, India’s GDP growth could be 6.5 percent.

The World Bank also lowered its growth forecast for the world economy for 2022 from 4.1% to 2.9%. The World Bank said in its report that global growth could decline from 5.7 percent in 2021 to 2.9 percent in 2022. In this global financial organization, in January, the world economic growth for 2022 was estimated at 4.1 percent.

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Inflation Effect
The growth rate is expected to decline due to higher inflation. Prices rose from fuel to food. Price-based inflation increased in April to 15.08 in April. Retail inflation is at an eight-year high. Several other rating agencies have also downgraded India’s growth rate estimates. These include Moody’s Investors Service and S&P Global Ratings. The International Monetary Fund also cut its growth forecast from 9 percent to 8.2 percent.

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