NEW DELHI: India Ratings and Research (Ind-Ra), a ratings agency, lowered India's FY23 projection to 7-7.2 percent on Wednesday.
As a result, the ratings agency believes that its January 2022 'FY23 Economic Outlook' is unlikely to remain true in light of the global geopolitical situation resulting from the Russia-Ukraine conflict.
"Because the duration of the Russia-Ukraine conflict remains uncertain, Ind-Ra has produced two scenarios based on certain assumptions for the FY23 economic projection." According to Ind-Ra, crude oil prices are expected to rise for three months in scenario one and six months in scenario two, both with a half-cost pass-through into the domestic economy.
"Ind-Ra anticipates GDP to expand 7.2 percent year over year in 'Scenario 1' and 7 percent year over year in 'Scenario 2' in FY23, compared to 7.6 percent in its previous prediction." "However, the Indian economy will still be 10.6 percent and 10.8 percent smaller in FY23 than the FY23 GDP trend value in 'Scenario 1' and 'Scenario 2', respectively." The agency said, consumption demand, as measured by private final consumption expenditure (PFCE), was weak in FY22, despite some signs of resurgence in sales of certain consumer durables during the festive season.