New Delhi, June 14 (KNN) As many of Asia’s economies slow, including China, India is booming and pulling the South Asia region forward along with it, Asian Development Outlook 2016, a publication of Asian Development Bank (ADB), said.

Despite slower growth in China that is having an impact in many countries across Asia, India’s booming economy is expected to grow at near 8% by 2017, the Outlook stated.

"The region’s two giants are headed in opposing directions, with China slowing down as growth in India picks up," the report noted.

The Outlook also emphasised that China is in the midst of a structural shift in its economy from manufacturing towards greater consumption and these changes are slowing down the economy whereas in India, initiatives by the government and rising income levels are boosting factory investments, leading to continued high economic growth.

"Chinese policy makers pursue a smooth transition to more moderate growth, their Indian counterparts strive to maximize growth," the report noted.

The strength of India’s economy is also driving regional growth.

South Asia is forecasted to post the most rapid growth of all developing regions in Asia. Economic growth in South Asia accelerated to 7.0% in 2015 and is expected to accelerate further to 7.3% in 2017. India is the clear economic bright spot in the region.

"Apart from weakness in export demand, other economies in the sub-region face unique challenges to growth: a devastating earthquake and a political standoff in Nepal, a drop in high-end tourism in the Maldives, and much-needed fiscal reform to deal with a build up of excessive debt in Sri Lanka," the report noted.

In India, where services have been a major driver of the economy, manufacturing and industry are now picking up, the report said.

After growing by 5.9% in 2014, industry accelerated further to 7.3% in 2015. Manufacturing growth rebounded to 9.5%, helped by lower input costs for factories, report said.

They credited decent growth of Indian economy to robust government spending on infrastructure – helped by lower fuel subsidies – and consumption among city dwellers, strengthening the manufacturing sector, the banking system, and increasing exports have led to this spurt in growth.

"Numerous measures enacted to attract foreign direct investment along with further measures to improve the business environment, will ensure that India remains a favored base for manufacturing and exporting," the Outlook said concluding the study. (KNN/ TL)