The United Nations on Thursday downgraded India’s projected economic growth for 2022 to 4.6 percent due to the ongoing war in Ukraine.
The United Nations Conference on Trade and Development (UNCTAD), in its latest report titled “Tapering in a Time of Conflict”, downgraded India’s projected growth from 6.7 percent to 4.6 percent for the year 2022 saying the Indian economy will suffer due to shocks from the Ukraine war and changes in macroeconomic policies.
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“India in particular will face restraints on several fronts: energy access and prices, primary commodity bottlenecks, reflexes from trade sanctions, food inflation, tightening policies and financial instability,” the report said.
The report also downgraded the global economic growth projection to 2.6 percent from 3.6 percent for the year 2022.
Russia invaded Ukraine in the last week of February and it has been over a month of death and destruction with no solution in sight.
In response to the invasion, the US and its NATO allies have heavily sanctioned Russia, virtually cutting it off from international trade and financial exchange.
The US went as far as banning energy imports from Russia.
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All these factors have effectively pushed the price of crude oil over US 100 per barrel which will in-turn result in huge inflation in developing and developed markets across the world.
As per a recent report by Moody’s Investors Service, India’s top fuel retailers lost a collective USD 2.25 billion or INR 19000 crore in revenue for the month of March as they kept the prices unchanged even as the global crude oil prices shot up.
Earlier this week, rating agency Fitch downgraded India’s economic growth from 10.3 percent to 8.5 percent for the year 2022-2023 due to rising inflation on the back of the Russia-Ukraine war.
Last week, Rating agency Moody had also downgraded India’s economic growth for the calendar year 2022 from 9.5 percent to 9.1 percent.
Prior to sanctions, Russia produced 10 million barrels of oil per day. It supplies 10 percent of the world's energy which includes 17 percent of natural gas and 12 percent of petrol/diesel.
