ADB slashes India growth forecast to 7.2% for FY23, sees higher inflation

Private investment will soften due to higher cost of borrowing for firms, says development bank's outlook

The Asian Development Bank (ADB) on Thursday slashed its growth forecast for India to 7.2 per cent for FY23 from 7.5 per cent estimated earlier citing higher than anticipated inflation since April and subsequent monetary tightening by the central bank.

The Manila-based multilateral development bank also raised its inflation forecast for India to 6.7 per cent for FY23 from 5.8 per cent projected earlier.

“Although consumer confidence continues to improve, higher-than-expected inflation will erode consumer purchasing power. Some of the impact of this may be offset by a cut in excise duties, the provision of fertilizer and gas subsidies, and