ADB Maintains India's Growth Forecast, Revises Outlook For Asia-Pacific

New Delhi, Jul 18 (KNN) The Asian Development Bank (ADB) has released its latest Asian Development Outlook report, maintaining India's gross domestic product (GDP) growth projection for the current financial year at 7 per cent.

The ADB has also slightly raised its forecast for developing Asia and the Pacific region to 5 per cent for 2024, up from the 4.9 per cent projected in April.

India is set to retain its position as the fastest-growing economy in the region, with the ADB citing a stronger-than-expected fiscal position of the central government as a potential growth catalyst.

However, the report also acknowledges potential downside risks from weather events and geopolitical shocks.

For the fiscal year 2025-26, the ADB projects India's GDP growth at 7.2 per cent, consistent with its April estimates.

This forecast aligns closely with the International Monetary Fund's (IMF) recent upward revision of India's growth projection to 7 per cent for the current financial year, though the IMF's outlook for FY 2025-26 is more conservative at 6.5 per cent.

The ADB report highlights robust growth expectations for India's industrial sector, particularly in manufacturing and construction.

Agriculture is anticipated to rebound, supported by forecasts of an above-normal monsoon. The bank also notes strong investment demand, primarily driven by public investment.

Regarding the broader Asia-Pacific region, ADB Chief Economist Albert Park noted accelerated economic growth compared to the latter half of the previous year.

While emphasising the region's strong fundamentals, Park cautioned about potential risks, including electoral uncertainties in major economies, interest rate decisions, and geopolitical tensions.

China's growth forecast remains unchanged at 4.8 per cent for the year, with the ADB citing continued recovery in services consumption and stronger-than-expected exports and industrial activity, despite ongoing challenges in the property sector.

The report projects a slowdown in inflation across developing Asia and the Pacific to 2.9% this year, attributed to easing global food prices and the effects of higher interest rates.

However, it notes that price pressures remain elevated in some economies, particularly in South Asia, Southeast Asia, and the Pacific, partly due to adverse weather conditions and food export restrictions in certain areas.

This comprehensive outlook provides a balanced view of the economic landscape in Asia, highlighting both growth opportunities and potential challenges facing the region in the coming years.

(KNN Bureau)