India's FY23 GDP forecast: S&P Global Ratings has reduced India's GDP growth forecast for the current fiscal year 2023 to 7.3 per cent from 7.8 per cent.
India's FY23 GDP forecast: Rating agency S&P Global Ratings has reduced India's growth forecast for the financial year 2023 to 7.3 percent from 7.8 percent. The rating agency has lowered its growth forecast due to rising inflation and a longer-than-expected Russia-Ukraine crisis. The rating agency says that it is worrying to remain at high levels of inflation for a long time. In such a situation, there is a need for central banks to increase interest rates further. S&P has given this information in its Global Macro Update on Growth Estimates.
In December last year, S&P had projected 7.8 percent GDP growth for the current financial year. With this, the growth forecast for the next financial year i.e. 2023-24 is 6.5 percent. GDP growth is estimated to be 8.9 percent in the financial year 2021-22. At the same time, the rating agency has estimated the CPI i.e. retail inflation rate for the current financial year at 6.9 percent.
Other global agencies including RBI also reduced estimates
Commodity prices have risen sharply due to the Russia-Ukraine conflict. After this, different global agencies have recently reduced India's GDP growth estimate. The World Bank has lowered India's GDP forecast for 2022-23 in April from 8.7 percent to 8 percent. At the same time, the IMF has reduced the growth forecast from 9 percent to 8.2 percent. The Asian Development Bank (ADB) has projected India's growth at 7.5 percent.
The Reserve Bank also cut its GDP growth forecast last month to 7.2 per cent from 7.8 per cent amid rising supply chain disruptions and rising crude prices due to the Russia-Ukraine conflict.
ICRA raised estimates
On the other hand, rating agency ICRA (ICRA) estimates that the Indian economy will grow at the rate of 12 to 13 percent in the first quarter of the current financial year. Rating agency Icra has retained the GDP growth rate estimate of 7.2 percent for the financial year 2021-22. The reasons behind this are rising inflation and hike in policy interest rates. Aditi Nair, Chief Economist, ICRA, said that our Business Activity Index for the month of April indicates that activity has been around 16 per cent higher than a year ago and pre-Covid levels.
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