Rating agency Fitch on Tuesday , March 22, slashed India’s growth forecast for the next fiscal to 8.5% from 10.3%, citing soaring energy prices and rising inflation on account of the Russia-Ukraine war. It has revised upwards the GDP growth forecast for the current fiscal by 0.6 percentage points to 8.7%. “However, we have lowered our growth forecast for FY 2022-2023 to 8.5% (-1.8 pp) on sharply higher energy prices,” Fitch said. For 2023-24, it is estimated at 7%. In its Global Economic Outlook-March 2022, Fitch said the post-Covid pandemic recovery is being hit by a potentially huge global supply shock that will reduce growth and push up inflation.

“The war in Ukraine and economic sanctions on Russia has put global energy supplies at risk. Sanctions seem unlikely to be rescinded any time soon,” the agency said.

Last week, another global rating agency Moody’s had slashed India’s growth estimate for the 2022 calendar year to 9.1% from 9.5% earlier, saying high fuel and fertiliser import bill could limit capital expenditure.

Russia supplies around 10% of the world’s energy, including 17% of its natural gas and 12% of oil.