India's economic growth will slow to 6.6 per cent in the next fiscal year from an expected 6.9 per cent in the current year, the World Bank said in its latest economic update.
"The slowdown in the global economy and rising uncertainty will weigh on export and investment growth," the World Bank said.
Increased infrastructure spending and "business facilitation measures" will, however, crowd-in private investment and support the expansion of manufacturing capacity, it added.
India is expected to be the fastest-growing economy of the seven largest emerging markets and developing economies, reports Reuters citing the global lender.
Beyond the fiscal year ending March 2024, growth in India is likely to slip back towards its potential rate of just over 6.0 per cent, the bank added.
For the South Asian region, growth in 2023 and 2024 is seen at 3.6 per cent and 4.6 per cent respectively. "This is mainly due to weak growth in Pakistan," the World Bank said.
Globally, the bank is forecasting a sharp, long-lasting slowdown, with global growth declining to 1.7 per cent in 2023 from the 3.0 per cent expected just six months ago.
"This reflects synchronous policy tightening aimed at containing very high inflation, worsening financial conditions, and continued disruptions from the Russian Federation’s invasion of Ukraine."