The World Bank said on Tuesday that India’s gross domestic product (GDP) will grow by 6.9% in the current fiscal year (April 2022 to March 2023), an improvement from the 6.5% previously estimated, judging that the Asian country is capable of facing the global economic situation.
“Although the deteriorating external environment will weigh on India’s growth prospects, its economy is relatively well positioned to weather global spillovers compared to most other emerging markets,” the World Bank predicted in a report.
This situation is due to the fact that this country of 1,300 million inhabitants has a large domestic market and is “less exposed to international trade flows”.
Along with the consequences of the COVID-19 pandemic, the Russian invasion of Ukraine has caused a storm in the world economy, by raising among other factors the prices of a barrel ofpetroleum.
The upward revision of GDP is due to a “good result” of the Indian economy in the second quarter (between July and September) of the fiscal year 2022-23, although the World Bank indicated that GDP will grow by 6.6% in the next fiscal year.
The Reserve Bank of India (RBI, central bank) forecasts growth of 7% for the current fiscal year, after recording a GDP increase of 13.5% in the first quarter and 6.3% in the second.
However, growth forecasts for 2022-23 are lower than the 8.7% recorded in the previous fiscal year.
The rupee is also at historic lows, while India is trying to ease inflationary pressure, currently above the tolerance level of 6%.