UBS cut India’s 2022-23 economic growth forecast by 70 basis points to 7% on Friday, citing slowing global growth due to high commodity prices, and weak local demand because of energy price hikes, inflationary pressures and a struggling labour market.
The downgrade comes a week after the World Bank lowered its economic growth forecast for India and the whole South Asia, citing worsening supply bottlenecks and rising inflation risks along with the Ukraine crisis.
“We believe the pass-through of high global commodity prices to the real economy will affect households’ purchasing power and company margins, and constrain the fiscal space available for capex,” UBS economist Tanvee Gupta Jain said in a note.
India meets nearly 80% of its oil needs through imports and rising crude prices push up the country’s trade and current account deficit while also hurting the rupee and fuelling imported inflation.
The Reserve Bank of India earlier this month raised its inflation forecast for the current fiscal year to 5.7%, 120 basis points above its forecast in February, while cutting its economic growth estimate to 7.2% from 7.8%.
UBS expects India’s gross domestic product growth to settle at a rate of 6% per annum beyond fiscal 2023.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
