S&P cuts FY23 India growth forecast to 7.3% on inflation, Ukraine war

19 May '22

1 min read

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S&P Global Ratings has cut India's growth projection for this fiscal to 7.3 per cent from 7.8 per cent earlier based on rising inflation and the dragging Russia-Ukraine conflict. In its Global Macro Update to Growth Forecasts, S&P said inflation remaining higher for long is a concern, which requires central banks to raise rates more than what is currently priced in, risking a harder landing, including a larger hit to output and employment.

S&P had in December last year pegged India's gross domestic product (GDP) growth in the 2022-23 fiscal at 7.8 per cent. For the next fiscal, the growth has been pegged at 6.5 per cent, a news agency reported.

"The risks to our forecasts have picked up since our last forecast round and remain firmly on the downside. The Russia-Ukraine conflict is more likely to drag on and escalate then end earlier and deescalate, in our view, pushing the risks to the downside," S&P said.

Indian economy is estimated to have clocked a GDP growth of 8.9 per cent in the last fiscal (2021-22).

S&P pegged CPI or retail inflation in the current fiscal at 6.9 per cent.

ALCHEMPro News Desk (DS)

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