The Asian Development Bank (ADB) has increased its economic growth forecast for India to 6.7% for the fiscal year 2023-24, up from the earlier prediction of 6.3% made in September. This upward revision is attributed to India's robust 7.6% GDP growth in the July-September quarter. The ADB highlights the industrial sector's double-digit growth, compensating for slightly slower-than-expected growth in agriculture. The growth forecast for 2024-25 remains unchanged at 6.7%. Increased capital spending by the central and state governments is expected to offset lower growth in private consumption and weaker-than-anticipated exports in 2023-24. GDPInflation forecasts for the current financial year stand at 5.5%. Additionally, the ADB raised China's 2023 growth projection to 5.2% and maintained the Asian region's growth forecast at 4.9% for 2023, with potential downside risks linked to global factors like interest rates and geopolitical events.
Key points:
1. The Asian Development Bank (ADB) has revised India's economic growth rate forecast for 2023-24 to 6.7%, up from the earlier prediction of 6.3% in September.
2. The adjustment is influenced by India's stronger-than-expected 7.6% GDP growth in the July-September quarter of the current financial year.
3. The ADB report highlights the industrial sector's double-digit growth, compensating for slightly slower-than-expected growth in agriculture.
4. Despite an upward revision for 2023-24, the ADB maintains its growth forecast for India at 6.7% for 2024-25.
5. Fixed investments, boosted by increased capital spending by the Central and state governments, are expected to offset lower growth in private consumption expenditure and weaker-than-expected exports.
6. Inflation forecasts for the current financial year remain unchanged at 5.5%, according to the ADB.
7. China's growth projection for 2023 has been raised to 5.2%, up from the previous forecast of 4.9% in September, with an expected slowdown to 4.5% in 2024.
8. The Asian region's growth projection for 2023 is revised to 4.9%, citing robust domestic demand, while the forecast for 2024 remains at 4.8%.
9. The upward adjustment in the region's growth is attributed to the revised projections for China and India.
10. The ADB identifies downside risks, including potential financial instability from higher interest rates in advanced economies and possible supply disruptions from events like El Nino and the Russian invasion of Ukraine, leading to renewed energy and food security challenges and inflation concerns.
(With Agency Inputs)
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