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Looking at the rising inflation and RBI's monetary policies to curb it, the Asian Development Bank has slashed India's economic growth projection for 2022-23 by 0.2 per cent.

Also Read: India to grow at over 7% in FY23: CEA Nageswaran

Earlier, the ADB had projected a growth of 7.2 per cent, which is now reduced to 7 percent. In a supplement report its flagship ADO report released on Wednesday, it was mentioned that the Indian economy recorded a 13.5 per cent year-on-year in the first quarter of 2022-23. The data reflected a promising strong growth in services.

Also Read: India's GDP will grow at 7.4% in FY 2022-23, says Nirmala Sitharaman

"However, GDP growth is revised down from ADO 2022's forecasts to 7 per cent for FY2022 (ending in March 2023) and 7.2 per cent for FY2023 (ending in March 2024) as price pressures are expected to adversely impact domestic consumption, and sluggish global demand and elevated oil prices will likely be a drag on net exports," it said.

The Asian Development Bank also reduced the overall growth projections for Asia and the Pacific regions due to global challenges.

What are the other growth projections for India's growth in 2022

Apart from ADB several other financial services and organisations have also adjusted their projection for India's growth in the current fiscal year. Recently, Fitch ratings also slashed India's growth forecast for 2022-23 to 7 per cent from previous estimates of 7.8 per cent.

Moody's Investors Service in its projections stated that the Indian economy will continue to fall in the current as well as the coming year. Moody's Investors Service slashed India's GDP growth projection from 8.3% in 2021 to 7.7% in 2022 and projected it to decelerate further to 5.2% in 2023. According to experts, one of the major reasons behind the falling performance of the Indian economy is global inflation and high-interest rates.

China to experience an economic slowdown in the coming year

India is not the only nation whose growth forecast was reduced by the ADB, as China's economic growth projections were reduced by 1.7 per cent. The ADO report expects Beijing to show an economic expansion of 3.3 per cent in 2022.

However, it was supposed to register a growth of 5 per cent, according to its earlier forecast. As the dragon continues to maintain its zero-tolerance policy on COVID, its cities may expect further lockdown and trade curbs in the future. The country is also facing problems in the property sector, and weaker external demand.

According to Moody's Analytics, China will also face trade disruptions due to its COVID policies. The disruptions could further worsen if China reacts to evolving US-Taiwan relations in the form of more military drills. According to Moody's Analytics, this could further impact shipping in the Taiwan Strait.

(With inputs from wire agencies)

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