India’s Economic Growth Forecast Retained by ADB: Positive Outlook for Robust Recovery
The Asian Development Bank (ADB) has reaffirmed its economic growth forecast for India, projecting a growth rate of 6.4 percent for the current financial year and 6.7 percent for the following year. This positive outlook comes as the ADB anticipates that robust domestic demand will continue to be a driving force behind the region’s economic recovery.
In its latest update to the Asian Development Outlook, the ADB also highlighted that inflation is expected to decrease, approaching pre-pandemic levels, with declines in fuel and food prices contributing to this trend. For developing economies in Asia, the ADB forecasts inflation of 3.6 percent this year and 3.4 percent in 2024.
India’s economy demonstrated resilience and growth, recording a notable 7.2 percent expansion in the fiscal year 2022-23, which concluded in March 2023. ADB’s Chief Economist, Albert Park, emphasized that the recovery in Asia and the Pacific is proceeding steadily, driven by strong domestic demand and service sector activity. Furthermore, many economies in the region are benefiting from a robust revival in tourism. However, Mr. Park also cautioned that industrial activity and exports remain weak, and the global growth outlook for the next year has worsened.Earlier, in April, the ADB had projected India’s economic growth to moderate to 6.4 percent for the current financial year. This moderation was attributed to tight monetary conditions and elevated oil prices, which could potentially impact the country’s growth trajectory.
The ADB’s retention of India’s growth forecast signifies a positive outlook for the nation’s economy amid ongoing recovery efforts from the pandemic’s impact. India’s economic resilience, supported by domestic demand and services activity, has been instrumental in driving growth during these challenging times. Additionally, the decline in inflation is a positive sign, indicating a potential easing of price pressures on consumers and businesses.Despite the positive prospects for India’s domestic demand, the ADB’s cautionary remarks on weak industrial activity and exports warrant attention. These factors may pose challenges to sustained economic growth and highlight the need for targeted policy measures to bolster the manufacturing and export sectors.
Globally, uncertainties surrounding the economic recovery persist, and the outlook for global growth remains uncertain for the upcoming year. The ADB’s assessment underscores the importance of vigilant economic management and the necessity for countries to adopt prudent policies to navigate potential headwinds and uncertainties.
While India’s economic growth forecast remains positive, policymakers and stakeholders must remain proactive in addressing challenges and seizing opportunities to foster sustainable growth. Continued efforts to enhance industrial productivity, boost exports, and attract foreign investment will play a crucial role in supporting economic expansion and strengthening India’s position in the global marketplace.
Moreover, the ADB’s recognition of the region’s reliance on domestic demand and services underscores the significance of promoting inclusive economic policies. Ensuring that all segments of society have access to economic opportunities and benefits will contribute to a more equitable and resilient recovery. As India continues its journey towards economic recovery and growth, cooperation and collaboration between the government, private sector, and civil society will be essential in addressing complex challenges and maximizing the potential for sustainable development.
News Mania Desk/ Agnibeena Ghosh , 19 July 2023
