The Asian Development Bank (ADB) on Wednesday retained India's economic growth forecast at 6.4 per cent for the current financial year and 6.7 per cent for the next, saying robust domestic demand will continue to support the region's recovery, the PTI said. In an update to its Asian Development Outlook, the ADB said inflation is expected to continue to fall, approaching pre-pandemic levels as fuel and food prices decline. It forecast 3.6 per cent inflation this year for developing economies in Asia, and 3.4 per cent in 2024.
The Indian economy grew 7.2 per cent in the 2022-23 fiscal ended March 2023. "Asia and the Pacific continues to recover from the pandemic at a steady pace," ADB Chief Economist Albert Park said. "Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism. However, industrial activity and exports remain weak, and the outlook for global growth and demand next year has worsened, Park added.
In April, the ADB had projected that India's economic growth is expected to moderate to 6.4 per cent in the current financial year due to tight monetary conditions and elevated oil prices.
Meanwhile, Fitch Ratings a fews ago revised India's economic growth forecast upwards to 6.3 per cent from 6 per cent for FY24, the PTI reported. This is primarily because of a stronger outturn in the first quarter and near-term momentum. The growth forecast compares with 7.2 per cent GDP expansion in FY23. In the previous fiscal year (FY22), the economy had grown 9.1 per cent.
The rating agency said, "India's economy has been showing broad-based strength, with GDP up by 6.1 per cent year-on-year in 1Q23 (January-March) and auto sales, PMI surveys and credit growth remaining robust in recent months, and we have raised our forecast for the fiscal year ending in March 2024 (FY23-24) by 0.3 percentage points to 6.3 per cent."
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