The Asian Development Bank (ADB) has revised its GDP growth forecast for India, raising it to 7% for the current fiscal year (2023-24) from its previous projection of 6.7%.
According to the ADB's April edition of the Asian Development Outlook, the robust growth will be driven by strong public and private sector investment demand, as well as a gradual improvement in consumer demand. However, the growth estimate for the 2024-25 fiscal year is lower than the 7.6% projected for 2022-23.
The ADB noted that the Indian economy grew remarkably in the 2022-23 fiscal year, with strong momentum in manufacturing and services. This growth is expected to continue over the forecast horizon, though it will moderate in the 2024-25 and 2025-26 fiscal years.
"The economy grew robustly in fiscal 2023 with strong momentum in manufacturing and services. It will continue to grow rapidly over the forecast horizon. Growth will be driven primarily by robust investment demand and improving consumption demand. Inflation will continue its downward trend in tandem with global trends," the ADB said in its report.
For the 2025-26 fiscal year, the ADB has projected India's growth at 7.2%. The bank also stated that exports are likely to be relatively muted in the current fiscal year due to slowing growth in major advanced economies, but will improve in the 2024-25 fiscal year.
The ADB's growth forecast for the 2024-25 fiscal year is in line with the projections made by the Reserve Bank of India (RBI). The central bank had earlier stated that GDP growth in the current fiscal year is expected to be 7%, driven by a normal monsoon, moderating inflationary pressures, and sustained momentum in the manufacturing and services sectors.
