India on track to achieve 5.5 per cent GDP growth in FY15, says ADB

The country is on track to achieve the projected economic growth rate of 5.5 per cent in the 2014-15 financial year as declining oil prices present a golden opportunity for many beneficial reforms, the Asian Development Bank (ADB) said on Wednesday.

"India is on track to reach the growth forecast of 5.5 per cent in FY2014 (ending 31 March, 2015) after expanding by 5.7 per cent in the first quarter and 5.3 per cent in the second quarter," Manila-based ADB said.

"The growth outlook in developing Asia remains steady despite a slowed momentum in the second half of 2014, but declining oil prices present a golden opportunity for many beneficial reforms in Asia," the agency said.

ADB said the government has demonstrated willingness to tackle contentious reforms by eliminating diesel subsidies, but it must extend its efforts to reach the forecast of 6.3 per cent GDP growth in FY16.

Falling global oil prices present a golden opportunity for importers like Indonesia and India to reform their costly fuel subsidy programmes, ADB Chief Economist Shang-Jin Wei said.

However, the agency lowered the GDP growth projection for the region to 6.1 per cent in 2014, from 6.2 per cent earlier, and to 6.2 per cent in 2015, from 6.4 per cent earlier.

Cutting the GDP forecast for China from 7.5 per cent earlier to 7.4 per cent in 2014, and 7.2 per cent in 2015 from 7.4 per cent, ADB said the growth moderation in PAC is seen extending.

"The growth moderation in China is seen extending into the fourth quarter due to a continued real estate market correction and its spillover to the related sectors like construction," the manila-based agency said.