ADB retains India’s economic growth at 6.4% for current fiscal

The Asian Development Bank (ADB) retained India’s economic growth forecast at 6.4 per cent for the current financial year, and 6.7 per cent for the next financial year. It credited domestic demand that has continued to support the region’s recovery. 

This comes after the Reserve Bank of India’s Monetary Policy Committee projected GDP growth of 2023-24 at 6.5 per cent. The real GDP growth for 2022-23 fiscal ended March 2023 was recorded at 7.2 per cent. 

Recently, Fitch Ratings raised its forecast for India's economic growth to 6.3 per cent for current fiscal year 2023-24 from 6 per cent it had predicted previously. Meanwhile, the World Bank had also pegged India's GDP growth forecast to 6.3 per cent in FY24. 

Additionally, ADB’s outlook pegged a decline in inflation, approaching pre-pandemic levels as fuel and food prices decline. It forecast 3.6 per cent inflation for Asia’s developing economies and 3.4 per cent in 2024. 

"Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism. However, industrial activity and exports remain weak, and the outlook for global growth and demand next year has worsened,” ADB Chief Economist Albert Park said. Asia and the Pacific continued to recover from the pandemic at a steady pace, he added. 

ADB, in April, had projected India's economic growth to moderate to 6.4 per cent in the current financial year due to tight monetary conditions and elevated oil prices.

China has been pegged to grow at 5 per cent this year and 4.5 per cent the next year. Growth in Southeast Asia is now expected at 4.6 per cent this year and 4.9 per cent next year, down from 4.7 per cent and 5 per cent previously, the ADB said. 

(With agency inputs)

Also read: RBI MPC meeting announcements: GDP growth projected at 6.5% for 2023-24

Also read: Fitch raises India's GDP forecast to 6.3% from 6% for current fiscal year