World Bank Slashes India's Growth Forecast to 8% for 2022-23 Amid Ukraine War

The World Bank headquarters in Washington DC.

(Photo: worldbank.org)

The World Bank on Wednesday, 13 April, slashed India's Gross Domestic Product (GDP) growth rate to 8 percent from 8.7 percent for the fiscal year 2022-23 due to economic difficulties posed by the ongoing war in Ukraine.

The body also cut the growth rate of South Asia, barring Afghanistan, by an entire percentage point to 6.6 percent, Reuters reported.

The global lender also stated that household consumption in India would be constrained by the incomplete recovery of the labour market from the COVID-19 pandemic and inflationary pressure.

"High oil and food prices caused by the war in Ukraine will have a strong negative impact on peoples’ real incomes," said Hartwig Schafer, World Bank Vice President for South Asia.

Growth Forecasts of Pakistan, Sri Lanka Raised Despite Crises

Meanwhile, the bank increased the growth forecasts of Pakistan and Sri Lanka despite weeks of turmoil in both countries.

Pakistan's growth rate prediction was raised to 4.3 percent from 3.4 percent for the current fiscal year ending in June, while for the next fiscal it was fixed at 4 percent.

Sri Lanka's GDP growth prediction was raised marginally to 2.4 percent from 2.1 percent amid an economic crisis engulfing the country that has sent prices of basic commodities soaring.

The central bank of Sri Lanka said on Tuesday that it had become "impossible" to repay external debt as a bulk of the country's diminishing foreign reserves were being used to import necessities like fuel.

(With inputs from Reuters.)