Amid international economic prospects largely due to the Russia-Ukraine conflict, the International Monetary Fund (IMF) has minimize its growth forecast for India for FY23 by 80 foundation factors to eight.2% from its earlier estimate of 9% in January.

The IMF has additionally revised the projection for global growth downwards to three.6% in each 2022 and 2023.

“The war in Ukraine has triggered a costly humanitarian crisis that demands a peaceful resolution. At the same time, economic damage from the conflict will contribute to a significant slowdown in global growth in 2022 and add to inflationthe agency said.

The IMF also predicted that the effects of the war will propagate for a long period, and will add to price pressures and exacerbate significant policy challenges.

The IMF highlighted that the war added to the series of supply shocks that have struck the global economy in recent years. Like seismic waves, its effects will propagate far and wide—through commodity markets, trade, and financial linkages.

Russia is a major supplier of oil, gas, and metals, and, together with Ukraine, of wheat and corn.

On Inflation

Inflation has become a clear and present danger for many countries. Even prior to the war, it surged on the back of souring commodity prices and supply-demand imbalances, IMF said.

Many central banks, such as the Federal Reserve, had already moved toward tightening monetary policy. War-related disruptions amplify those pressures. IMF now expects inflation to remain elevated for much longer. In the United States and some European countries, it has reached its highest level in more than 40 years, in the context of tight labor markets.