Robust Investment Activities To Drive India's Growth For FY25. Check ADB's New GDP Forecast

ADB GDP Forecast: India's GDP growth forecast raised to 7 per cent from the previous estimate of 6.7 per cent, citing strong investment demand from both public and private sectors

ADB GDP Forecast 

The Asian Development Bank (ADB) has revised India's GDP growth forecast for the current fiscal year upward to 7 per cent from the previous estimate of 6.7 per cent, citing strong investment demand from both public and private sectors, as well as gradual improvement in consumer demand. In its latest report released on Thursday, the ADB said the resilience of the Indian economy, noting that despite a lower projection compared to the previous fiscal year's growth of 7.6 per cent, robust investment activities are expected to be the main driver of growth.

RBI estimate

The ADB's GDP forecast aligns with projections made by the Reserve Bank of India (RBI), which also anticipates a 7 per cent GDP growth for the current fiscal year. Factors contributing to this optimism include expectations of a normal monsoon, easing inflationary pressures, and sustained momentum in both manufacturing and services sectors.

While the ADB expects exports to remain subdued in the near term due to slowing growth in major advanced economies, the bank expects an improvement in the fiscal year 2025. The bank underscores the importance of India's integration into global value chains to bolster exports in the medium term.

Looking ahead

Looking ahead, the ADB predicts a moderate slowdown in growth for the fiscal year 2024, followed by a rebound to 7.2 per cent in FY25. It anticipates supportive monetary policies amid declining inflation, coupled with fiscal policies aimed at consolidating while still supporting capital investment.

With both the ADB and RBI sharing a positive outlook for India's economic growth, there is optimism regarding the country's resilience and ability to navigate through global economic challenges. However, attention to policy measures aimed at bolstering exports and sustaining investment momentum will be crucial in realising these growth projections.