The World Bank and Asian Development Bank (ADB) recently presented their regional economic outlook for 2023, revising down their projections for India’s growth prospects. The World Bank reduced its real GDP growth forecast for India to 6.3% from 6.6%, and from the 7% projection made in October 2022. It cited rising borrowing costs affecting consumption demand, a likely contraction in government consumption, and a decline in services sector growth to a three-year low of 6.7% from 9.5% in 2022-23 as reasons for the downgrade. Similarly, the ADB reduced India’s 2023-24 GDP growth forecast from 7.2% to 6.4%, attributing the cut to tight monetary conditions and waning optimism on business conditions, leading to lower growth in private investments. Despite the downgrades, both institutions acknowledged China’s rebound and India’s healthy domestic demand as factors lifting Asia’s overall growth prospects. They also cited challenges in the global economy, such as bank failures in the developed world and concerns about rising oil prices due to production cuts, as contributing factors. The Indian government, which presented its Union Budget after the previous 7%-plus growth forecasts, had not expressed such high expectations for this year. The Economic Survey projected 2023-24 growth at 6.5%, while the Reserve Bank of India (RBI) estimated it at 6.4%. India’s current growth estimate for last year is 7%, with the World Bank and ADB expecting slightly lower figures at 6.9% and 6.8%, respectively. A clearer picture of the base for calculating this year’s growth will emerge by the end of May when the first estimates for the last quarter of 2022-23 will be released. By then, the 2023-24 forecasts will likely be revised. However, policymakers should not be overly concerned with these fluctuating numbers but should pay attention to the stress signs being highlighted and proactively address potential issues to minimize any impending damage.