Editor's Pick: The World Bank pares down growth estimate for India

The World Bank downgraded its estimate for India’s growth in the current fiscal year to 6.5% from its projection of 7.5% in June. The slowing was because most of the COVID recovery happened last year, the report said. The growth estimate was revised downwards due to a deteriorating international environment including global monetary tightening, high commodity prices and interest rates impacting demand. The World Bank said economies in the South Asian region that are services-led, such as India, the Maldives and Nepal, are expected to maintain a reasonable recovery trend despite headwinds, whereas economies such as Afghanistan, Sri Lanka and Pakistan are expected to see an increase in poverty. It cited persistent pressures such as the war in Ukraine, the economic crisis in Sri Lanka and the floods in Pakistan as reasons for this unevenness in recovery in the region. The World Bank’s projections come on the heels of the Asian Development Bank paring down its growth estimates for India to 7% in September from 7.5% in April, citing higher-than-anticipated inflation and monetary tightening, and the Reserve Bank of India also cutting its growth outlook to 7% from an earlier estimate of 7.2% and increasing interest rates by 50 basis points to 5.9% to fight inflation, in the latest Monetary Policy Committee meeting. The RBI had said that after the pandemic and the war in Ukraine, the third shock to the economy had come in the form of aggressive monetary policy actions and even more aggressive communication from advanced economy central banks. The rupee has been consistently weakening under pressure, which has added upward pressure to price stability by way of imported inflation. This editorial pointed out that “with the RBI’s latest survey of households’ inflation expectations and consumer confidence too signalling that price pressures will continue to contain consumption, inflation will have to remain the top policy priority.” However, there is a silver lining in the World Bank’s report, which states that India, despite the challenges, is recovering faster than the rest of the world. As this is the third time the World Bank has revised downwards its GDP forecast for India in FY23, and as India’s services sector activity fell to a six-month low in September and manufacturing to a three-month low, this is the top pick of the day. Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor‘s Pick and more. Click here The Hindu’s Editorials Don’t lure, but persuade: On fiscal rationale and poll promises No longer bizarre: On 2022 Physics Nobel The Hindu’s Daily Quiz Which model placed the sun at the centre of the solar system, and demoted the earth to another circumscribed, perambulatory planet? Galileo’s model Kepler’s model Copernican revolution Ptolemaic model To know the answer and to take the quiz, click here [logo] Editor's Pick 07 OCTOBER 2022 [The Hindu logo] In the Editor's Pick newsletter, The Hindu explains why a story was important enough to be carried on the front page of today's edition of our newspaper. [Arrow]( [Open in browser]( [Mail icon]( [More newsletters]( The World Bank pares down growth estimate for India The World Bank [downgraded its estimate]( for India’s growth in the current fiscal year to 6.5% from its projection of 7.5% in June. The slowing was because most of the COVID recovery happened last year, the report said. The growth estimate was revised downwards due to a deteriorating international environment including global monetary tightening, high commodity prices and interest rates impacting demand. The World Bank said economies in the South Asian region that are services-led, such as India, the Maldives and Nepal, are expected to maintain a reasonable recovery trend despite headwinds, whereas economies such as Afghanistan, Sri Lanka and Pakistan are expected to see an increase in poverty. It cited persistent pressures such as the war in Ukraine, the economic crisis in Sri Lanka and the floods in Pakistan as reasons for this unevenness in recovery in the region. The World Bank’s projections come on the heels of the [Asian Development Bank paring down]( its growth estimates for India to 7% in September from 7.5% in April, citing higher-than-anticipated inflation and monetary tightening, and the Reserve Bank of India also cutting its growth outlook to 7% from an earlier estimate of 7.2% and [increasing interest rates by 50 basis points]( to 5.9% to fight inflation, in the latest Monetary Policy Committee meeting. The RBI had said that after the pandemic and the war in Ukraine, the third shock to the economy had come in the form of aggressive monetary policy actions and even more aggressive communication from advanced economy central banks. The rupee has been consistently weakening under pressure, which has added upward pressure to price stability by way of imported inflation. [This editorial]( out that “with the RBI’s latest survey of households’ inflation expectations and consumer confidence too signalling that price pressures will continue to contain consumption, inflation will have to remain the top policy priority.” However, there is a silver lining in the World Bank’s report, which states that India, despite the challenges, is recovering faster than the rest of the world. As this is the third time the World Bank has revised downwards its GDP forecast for India in FY23, and as India’s services sector activity fell to a six-month low in September and manufacturing to a three-month low, this is the top pick of the day. Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor‘s Pick and more. [Click here]( The Hindu’s Editorials [Arrow][Don’t lure, but persuade: On fiscal rationale and poll promisesÂ]( [Arrow][No longer bizarre: On 2022 Physics NobelÂ]( The Hindu’s Daily Quiz Which model placed the sun at the centre of the solar system, and demoted the earth to another circumscribed, perambulatory planet? - Galileo’s model - Kepler’s model - Copernican revolution - Ptolemaic model To know the answer and to take the quiz, [click here]( Today’s Best Reads [[RSS chief’s population control call clashes with Centre’s affidavit in Supreme Court] RSS chief’s population control call clashes with Centre’s affidavit in Supreme Court]( [[Cough syrups exported only to the Gambia, finds drug regulator’s probe] Cough syrups exported only to the Gambia, finds drug regulator’s probe]( [[Lionel Messi says 2022 World Cup in Qatar will ‘surely’ be his last] Lionel Messi says 2022 World Cup in Qatar will ‘surely’ be his last]( [[India abstains on Sri Lanka vote at Human Rights Council] India abstains on Sri Lanka vote at Human Rights Council]( Copyright @ 2022, THG PUBLISHING PVT LTD. 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