Asian Development Bank Lifts India's Growth Projection To 7%

The Asian Development Bank (ADB) revised India's GDP growth forecast for the current fiscal year to 7 per cent, up from the earlier projection of 6.7 per cent. The ADB attributed this robust growth to increased investment from both the public and private sectors and an improvement in consumer demand. According to the April edition of the Asian Development Outlook, India is expected to remain a significant driver of economic growth in the Asia-Pacific region.

Looking ahead to the 2025-26 fiscal year, the ADB has forecasted India's growth to reach 7.2 per cent. Despite some moderation in growth during the FY2024 and FY2025 periods, the ADB anticipates continued robust expansion.

While the projected growth for the current fiscal year is slightly lower than the 7.6 per cent GDP expansion witnessed in the 2022-23 fiscal year, the ADB noted that strong investment activity was the primary driver of growth during that period, as consumer spending remained subdued.

The ADB's growth outlook aligns with projections made by the Reserve Bank of India (RBI). The Manila-based multilateral institution had previously estimated a 6.7 per cent expansion for the Indian economy in the 2024-25 fiscal year.

According to the Asian Development Outlook, India's economy exhibited robust growth in fiscal year 2023, driven by strong momentum in manufacturing and services sectors. The outlook anticipates this growth momentum to continue, primarily fueled by robust investment demand and an uptick in consumption. Additionally, inflation is expected to maintain a downward trajectory in line with global trends.