ADB Retains India's Growth Forecast at 7%, Highlights Economic Acceleration

The Asian Development Bank (ADB) maintained India's growth forecast at 7% for the current fiscal. The economy is anticipated to accelerate due to improved agricultural output and increased government spending. While private consumption and investment remain strong, public capital expenditure growth will moderate in FY2025.

The Asian Development Bank (ADB) has upheld its forecast for India's economic growth at 7% for the current fiscal year, projecting an acceleration in the upcoming quarters driven by enhanced farm outputs and elevated government spending.

According to the ADB's Asian Development Outlook update for September, India's export projections for the current fiscal have been revised upwards, primarily due to an increase in services exports, while merchandise exports will see muted growth in the next fiscal year.

GDP growth for FY2024 is pegged at 7% and 7.2% for FY2025. Despite a slowdown to 6.7% in the first quarter of FY2024, subsequent quarters are expected to improve with better agricultural performance, robust industry and services, and strong rural and urban consumption driving private consumption. Fiscal deficit projections indicate a return to pre-COVID-19 levels, with worker and firm incentives expected to boost job creation.

(With inputs from agencies.)