ADB Raises India’s FY26 Growth Forecast To 7.2%, Citing Economic Resilience

New Delhi, Dec 10 (KNN) The Asian Development Bank (ADB) has raised India’s economic growth forecast for FY26 to 7.2 per cent from 6.5 per cent earlier, citing strong domestic consumption supported by recent tax cuts.

Strong Consumption, Manufacturing Drive Growth

In its Asian Development Outlook, December 2025, the multilateral agency said the upgrade reflects stronger-than-expected economic expansion, particularly in the second quarter. 

India recorded GDP growth of 8.2 per cent in the July–September quarter of current fiscal, a six-quarter high, compared to 7.8 per cent in the previous quarter, resulting in 8 per cent growth in the first half of the current fiscal.

ADB attributed the momentum to robust manufacturing and services activity on the supply side, and higher consumption and investment demand.

Positive Spillover for Asia

ADB noted that India’s stronger outlook will lift Asia’s overall growth to 5.1 per cent in 2025, higher than its earlier projection of 4.8 per cent. However, the multilateral lender retained India’s FY27 growth forecast at 6.5 per cent.

Inflation Outlook Improves

The ADB has cut India’s FY26 inflation forecast to 2.6 percent from 3.1 percent, citing lower food prices from a good monsoon and GST cuts, with inflation expected to stay subdued before rising in early FY27.

ADB’s upgraded outlook highlights India’s economic resilience amid global uncertainties, with strong domestic demand, tax cuts and easing inflation supporting near-term growth. 

(KNN Bureau)