ADB upbeat on India’s GDP growth

The Asian Development Bank (ADB) on Thursday raised India’s GDP growth forecast for the current fiscal to 7 per cent, from 6.7 per cent earlier, saying the robust growth will be driven by public and private sector investment and improvement in consumer demand. In its April edition of the Asian Development Outlook, ADB said India would remain a major growth engine in the Asia and Pacific region.

For the 2025-26 fiscal, ADB has projected India’s growth at 7.2 per cent. Growth will be robust despite moderating in FY2024 and FY2025, it said.

The growth estimates for the current fiscal is lower than 7.6 per cent estimated GDP expansion in 2022-23 fiscal. Strong investment drove GDP growth in the 2022-23 fiscal as consumption was muted, ADB said. The Manila-based multilateral institution in December last year projected the Indian economy to expand by 6.7 per cent in the 2024-25 fiscal. “The economy grew robustly in fiscal 2023 with strong momentum in manufacturing and services. It will continue to grow rapidly over the forecast horizon. Growth will be driven primarily by robust investment demand and improving consumption demand. Inflation will continue its downward trend in tandem with global trends,” said the Asian Development Outlook.

ADB’s growth forecast for the current fiscal is in line with the projections made by the Reserve Bank of India (RBI). The RBI last week had said GDP growth in the current fiscal is projected at 7 per cent on expectations of normal monsoon, moderating inflationary pressures and sustained momentum in manufacturing and services sectors. The triggers for growth in FY2024 will come from higher capital expenditure on infrastructure development both by central and state governments, rise in private corporate investment, strong service sector performance and improved consumer confidence.