Categories: Economy

ADB Keeps India’s GDP Growth Unchanged at 7%

The Manila-based Asian Development Bank kept its economic growth outlook for India unchanged at seven percent for the fiscal 2022-23. The bank also forecasted a weaker-than-previously expected pace for developing Asia. The seven percent growth projection for fiscal 2022-23, unchanged from its September forecast, against 8.7 percent GDP growth in the previous fiscal.

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Continuity Of Growth Prospects:

For the next fiscal year, FY 23-24, the GDP growth has been kept unchanged at 7.2 percent, “sustained by positive effects from structural reform and from public investment catalysing private investment”.

About Asia’s Growth Projection:

The Manila-based bank’s report sees Asia expanding 4.2 percent this year and accelerating to 4.6 percent in 2023. The previously estimated expansion stood at 4.3 percent and 4.9 percent, respectively.

What The Report Pointed:

“While some recent high-frequency indicators are more favourable than expected — notably consumer confidence, electricity supply and purchasing managers’ indexes — others are a little less favourable, in particular exports, largely textiles and iron ore, and the index of industrial production of consumer goods,” the report said.

The Inflation Problem:

The report said that inflation in the country is still expected to rise to 6.7 percent in 2022-23 before falling back to 5.8 percent.

About India’s Bright & Dull Spots:

“In India, the economy grew by 6.3 percent in the second quarter (July-September) of the fiscal year 2022-23, reflecting contraction in public consumption of 4.4 percent even as exports grew by 11.5 percent despite the global slowdown,” ADB said.
On the supply side, the increase was led by service sector growth at 9.3 percent, contributing 4.6 percentage points to GDP growth. Industry, by contrast, suffered a small contraction by 0.8 percent, dragged down by contraction in manufacturing and mining, ADB added.

What is ADB:

The Asian Development Bank is a regional development bank (ADB) established on 19th December 1966. It is headquartered in Manila, Philippines.

It was formed as a result of a resolution passed at the first Ministerial Conference on Asian Economic Cooperation held by the United Nations Economic Commission for Asia and the Far East (ESCAFE) in 1963.

Main objectives of ADB:

  • The Asian Development Bank (ADB) envisions a prosperous, inclusive, resilient, and sustainable Asia and the Pacific. It aims to eradicate extreme poverty in the region.
  • ADB assists its members, and partners, by providing loans, technical assistance, grants, and equity investments to promote social and economic development.
  • ADB facilitates policy dialogues, provides advisory services, and mobilizes financial resources through financing operations that tap official, commercial, and export credit sources.

ADB and India:

ADB is contributing to India’s fast, green and inclusive recovery from Covid 19, with investments in infrastructure, small enterprise development and social sector.

Some of the projects assisted by ADB include:

  • A USD 96.3-million loan agreement to provide safe drinking water and improve water supply and sanitation services in the state of Himachal Pradesh.
  • A $500 million loan to expand the metro rail network in Bengaluru
  • A USD 4.5 million Project Readiness Financing (PRF) loan to support urban mobility in Mizoram.

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Piyush Shukla

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