New Delhi: India’s economic growth forecast was downgraded by the World Bank on Wednesday, citing poor supply constraints and rising inflation risks due to the Russia-Ukraine conflict.
According to a Reuters report, the international lender has cut its growth forecast for the region’s largest economy, India, from 8.7 per cent for the current fiscal year to March 2023, to 8 per cent, and cut growth by a full percentage point. The outlook has declined. For South Asia, excluding Afghanistan, 6.6 percent.
The report noted that incomplete recovery of the labor market from the pandemic and inflationary pressures in the country would hamper domestic consumption, the bank said.
“High oil and food prices due to the war in Ukraine will have a strong negative impact on people’s real incomes,” said Hartwig Schaefer, World Bank Vice President for South Asia.
However, the World Bank raised its growth forecast for Pakistan, the region’s second-largest economy, to 4.3 per cent from 3.4 per cent for the current year ending in June and kept its growth outlook for the next year unchanged at 4 per cent.
The sector’s reliance on energy imports has meant that high crude oil prices forced its economies to focus their monetary policies on inflation, rather than reviving economic growth after nearly two years of pandemic restrictions. for.
The World Bank lowered this year’s growth forecast for the Maldives to 7.6 percent from 11 percent, citing large imports of fossil fuels and declining tourist arrivals from Russia and Ukraine.
It raised crisis-hit Sri Lanka’s 2022 growth forecast from 2.1 percent to 2.4 percent, but warned that the island’s outlook was highly uncertain due to fiscal and external imbalances.
Sri Lanka’s central bank said on Tuesday that repaying external debt has become “challenging and impossible” as it tries to use its dwindling foreign exchange reserves to import essential commodities such as fuel.