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The UN Trade and Development Conference (UNCTAD), in its latest Trade and Development Report Update, has said that India's economic growth is projected to decelerate to 6 per cent in 2023 from 6.6 per cent in 2022. It expects global growth in 2023 to drop to 2.1 per cent, compared to the 2.2 per cent projected in September 2022, assuming the financial fallout from higher interest rates is contained to the bank runs and bailouts of the first quarter. It warned that developing countries are facing years of difficulty as the global economy slows down amid heightened financial turbulence. Annual growth across large parts of the global economy will fall below the performance registered before the pandemic and well below the decade of strong growth before the global financial crisis.

Besides, it said India grew 6.6 per cent in 2022, ceding the pole position among G20 countries in 2022 to oil-rich Saudi Arabia, which grew at 8.6 per cent. Meanwhile, as current government spending has been weakening, but export orders remain on the rise, India's GDP growth is projected to decelerate to 6.0 per cent in 2023. For India, it said the positive effect of high public and private investment and consumption as well as rising exports was partly offset by higher energy import bills, which deepened the current account deficit and ate up reserves.

The report mentioned ‘The Reserve Bank of India started tightening its policy stance during the spring of 2022 to limit damage caused by foreign capital outflows, a weakening currency and inflation risks. Higher financing cost slightly dented buoyant economic activity, and over-leveraging in the corporate sector may become a factor of financial instability.’ It noted in view of financing its growth ambitions, the Indian government has committed to massive infrastructure investment. In 2020 and 2021 and in the energy sector alone, funds amounting to $160 billion had been committed to fossil and non-fossil projects alike.