ADB Slashes India's FY23 GDP Forecast To 7.2%

Asian Development Bank (ADB) on Thursday trimmed India's economic growth forecast for current fiscal year to 7.2 per cent from 7.5 per cent as pandemic and war impact is weighing down alongside inflationary pressures.

India, however, will continue to surpass China which is expected to grow by 4 per cent in 2022 as against the earlier estimate of 5 per cent. In 2023 also, China is expected to grow by 4.8 per cent, according to a PTI news.

In April, the Manila-headquartered multilateral funding agency had forecast the Indian economy to grow by 7.5 per cent. China grew by 8.1 per cent in 2021, as against 8.7 per cent economic growth recorded by India during the fiscal 2021-22, added the PTI news.

For India, ADB also revised downwards the economic growth in fiscal ended March 2022 to 8.7 per cent from 8.9 per cent estimated earlier. "India has been hit by the omicron COVID-19 variant and the economic impact of the war in Ukraine.

Consequently, GDP growth for FY2021 is revised down from 8.9 per cent to 8.7 per cent and from 7.5 per cent to 7.2 per cent for FY2022 (fiscal to be ending in March 2023), as per the PTI report.

"Although consumer confidence continues to improve, higher-than-expected inflation will erode consumer purchasing power," ADB said in its supplement to the Asian Development Outlook (ADO) for 2022 released on Thursday.

Some of the impacts of this may be offset by a cut in excise duties, provision of fertilizer and gas subsidies, and extension of a free food distribution programme.