World Bank Predicts India’s Economic Growth to Slow to 6.9% in FY23: As the global economy and growing unpredictability weigh on export and investment growth, the World Bank predicts that India’s GDP would drop to 6.9% in Financial Year 2023, a 0.6 percentage point decrease since June. However, India is expected to be the fastest growing economy among the seven largest developing economies. The World Bank predicted that global growth in 2023 would slow to 1.7 per cent from the 3 per cent expected six months ago, citing elevated inflation, higher interest rates, reduced investment and disruptions caused by Russia’s invasion of Ukraine.
January 2023 Current Affairs Quiz
More About This Transition: A Steady Decline In GDP Growth:
In India, growth is anticipated to slow from 8.7% in FY 2021–22 to 6.9% in FY2023-23, with the latter estimate having been revised lower by 0.6 percentage points since June. The global economic slowdown and rising uncertainty will weigh on export and investment growth. Government infrastructure spending and various business facilitation measures will crowd in private investment and support the expansion of manufacturing capacity.
A Further Deterioration In Growth Prospects:
Growth is expected to slow to 6.6 per cent in FY2023-24 before returning to its potential rate of just above 6 per cent. India is predicted to have the fastest growing economy among the seven largest developing economies (EMDEs).
Recession In World Economy:
Given the global economy’s precarious state, any new negative development—such as higher-than-expected inflation, sharp rises in interest rates to contain it, a resurgence of the Covid-19 pandemic, or escalating geopolitical tensions—could send it into recession. This would be the first time in more than 80 years that two global recessions occurred within the same decade.
The IMF predicts that global growth would decline from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023. Global growth has slowed due to the lag effect of global central banks tightening monetary policy and weakening external demand. The RBI forecasts a 6.8 per cent growth in India’s GDP in FY23.
