New Delhi: After considering the current scenario of many businesses across the world, and the situation of many countries, the world bank (WB) on Thursday slashed India’s Gross Domestic Product (GDP) growth rate to 6.5 percent. In June 2022, it had projected that the Indian economy will grow at a rate of 7.5 percent.
In April also, the World Bank had cut India’s GDP forecast from 8.7 percent to 8 percent. At the same time though, it noted that India’s economic recovery is faster than the rest of the world.
According to WB South Asia economic focus report for October 2022, GDP is forecasted to grow 7% in FY24 against 7.1 percent estimated in June.
The Reserve Bank of India (RBI) had also cut the economic growth projection for 2022-23 from 7.2 percent to 7 percent, citing the tightening of rates by the US Federal Reserve and the prevailing geopolitical scenario.
The manufacturing sector in India has been affected by sluggish domestic demand for goods, the global Omicron wave, and higher input costs, which have squeezed the price margins of the manufacturers, the World bank said.
Still, both manufacturing and services activities have been expanding in India since at least January, and at faster speeds than the rest of the world, the report said. The continued improvement in economic activities is in part thanks to relaxed Covid measures and a pick-up in domestic demand including for contact-intensive services as Covid risk subsides, it stated.
(Vinayak)
