S&P Global Ratings on Wednesday cut India's growth projection for the current fiscal to 7.3 per cent from 7.8 per cent earlier on rising inflation and the longer-than-expected Russia-Ukraine conflict.
In its Global Macro Update to Growth Forecasts, S&P said inflation remaining higher for long is a worry, which requires central banks to raise rates more than what is currently priced in, risking a harder landing, including a larger hit to output and employment.
S&P had in December last year pegged India's GDP growth in the 2022-23 fiscal, which began on April 1, 2022, at 7.8 per cent.
The growth projection has been cut to 7.3 per cent for the current fiscal.
For the next fiscal the growth has been pegged at 6.5 per cent.
"The risks to our forecasts have picked up since our last forecast round and remain firmly on the downside.
"The Russia-Ukraine conflict is more likely to drag on and escalate than end earlier and deescalate, in our view, pushing the risks to the downside," S&P said.
Indian economy is estimated to have clocked a GDP growth of 8.9 per cent in the last fiscal (2021-22).
S&P pegged CPI or retail inflation in the current fiscal at 6.9 per cent.
In the aftermath of the Russia-Ukraine war and rising commodity prices, various global agencies have cut India's growth forecast recently.
The World Bank in April slashed India's GDP forecast for fiscal 2022-23 to 8 per cent from 8.7 per cent predicted earlier, while IMF has cut the projections to 8.2 per cent from 9 per cent.
Asian Development Bank (ADB) has projected India's growth at 7.5 per cent, while the RBI, last month, cut its forecast to 7.2 per cent from 7.8 per cent amid volatile crude oil prices and supply chain disruptions due to the ongoing Russia-Ukraine war.