The World Bank has cut its forecast for India and the whole South Asian region on Wednesday, citing worsening supply bottlenecks and rising inflation risks caused by the Ukraine crisis.
The World Bank lowered its growth estimate for India, the region’s largest economy, to 8 per cent from 8.7 per cent for the current fiscal year to March, 2023 and cut by a full percentage point the growth outlook for South Asia, excluding Afghanistan, to 6.6 per cent.
In India, household consumption will be limited by the incomplete recovery of the labour market from the pandemic and inflationary pressures, the bank said.
“High oil and food prices caused by the war in Ukraine will have a strong negative impact on peoples’ real incomes,” Hartwig Schafer, World Bank Vice President for South Asia, said in a statement.