OECD Slashes India Growth Forecast To 6.9% In FY23

The Organisation for Economic Cooperation and Development (OECD) sharply slashed the growth for India to 6.9% growth in FY23 from 8.1% estimated earlier and to 6.2 percent in 2023. This is below the Reserve Bank of India's estimate of a 7.2% rise. India's Gross domestic product (GDP) grew 8.7% in 2021-22, making it the fastest-growing major economy in the world. The RBI on Wednesday hiked key repo rate by 50 basis points (bps) to 4.9% in a bid to tame soaring inflation in the country. It began monetary policy tightening in May, intending to anchor inflation expectations and limit second-round effects. OECD expects policy rate to rise to 5.3% by the end of 2022 and remain there in 2023. On Tuesday, the World Bank similarly severely pared India's FY23 forecast to 7.5% from 8.5% in the April review.

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