The World Bank has reduced India's growth forecast for the current fiscal year to 7.5 percent, a significant 1.2 percentage point decrease from its previous forecast of 8.7 percent.
The World Bank cut India's GDP growth forecast in its latest Global Economic Prospects report, released on June 7, citing downside risks from rising inflation, distribution network disruptions, and geopolitical tensions.
According to the bank, India's growth will slow further to 7.1 percent in FY24. This is a 30 basis point increase over the previous estimate of 6.8 percent. GDP growth is expected to be 6.5 percent in FY25. A basis point is equal to one hundredth of a percentage point.
While the growth forecast for FY23 has been significantly revised downward, it remains higher than local projections. The Reserve Bank of India (RBI), for example, forecasts 7.2 percent GDP growth in FY23. This figure could be reduced when the Monetary Policy Committee (MPC) announces its latest interest rate decision on June 8.