World Bank slashes India's 2022-23 growth to 7.5pc, but will keep top spot

UNITED NATIONS: The World Bank has reduced India's growth projections for the current fiscal year to 7.5 percent, citing a global economic slowdown as a result of the Russian invasion of Ukraine, but the country will keep its status as the world's fastest-growing economy.

The Bank's Global Prospects Report lowered India's GDP prediction by 0.5 percentage points from its April forecast of 8 percent, when the impact of the Ukraine war was just beginning to be noticed, and by 1.2 percentage points from its January forecast of 8.7 percent.

It expected India's growth to be 8.7 percent in the previous fiscal year. The global economy's growth rate was decreased by 1.2 percent, from 4.1 percent in January to 2.9 percent, according to the report.

President of the World Bank, David Malpass, has given a strong warning that the world is on the verge of stagflation, which is defined as economic stagnation combined with rising inflation. "Even if a worldwide recession is avoided, stagflation's suffering might last for years unless large supply increases are implemented," he warned.

"Headwinds from rising prices, supply chain disruptions, and geopolitical tensions offsetting buoyancy in the recovery of services demand after the epidemic," according to the Bank. "Rising inflationary pressures necessitated an unscheduled policy interest rate hike in May," the statement read.

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