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The Organisation for Economic Cooperation and Development (OECD) in its latest Interim Economic Outlook has retained the India’s Gross Domestic Product (GDP) growth projection at 6.9 per cent for the current financial year (FY23) despite the global economy losing momentum in wake of the Russia-Ukraine war. In the June 2022 Economic Outlook, the OECD projected the GDP growth for India at 6.9 per cent. It said ‘Softer external demand is a factor in India’s projected slowdown from 8.7 per cent annual growth in FY2021-22 to around 7 per cent in FY 2022-23 and around 5¾ per cent in FY 2023-24, but this still represents rapid growth in the context of a weak global economy’.

It also said the global economy has lost momentum in the wake of Russia’s war of aggression in Ukraine, which is dragging down growth and putting additional upward pressure on inflation worldwide. The outlook projects global growth at a modest 3 per cent this year before slowing further to just 2.2 per cent in 2023. This is well below the pace of economic growth projected prior to the war and represents around USD 2.8 trillion in foregone global output in 2023. It further said growth in China has also been hit and is expected to drop to a projected 3.2 per cent in 2022.

It noted that except for the 2020 pandemic, this will be the lowest growth rate in China since the 1970s. Inflation is projected to recede gradually through 2023 in most G20 countries as the tighter monetary policy takes effect and global growth slows. Headline inflation is projected to ease from 8.2 per cent this year to 6.6 per cent in 2023 in the G20 economies, and fall from 6.2 per cent this year to 4 per cent in 2023 in the G20 advanced economies. The report projects inflation for India at 6.7 per cent, at the same level as in its June 22 Economic Outlook.