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Asian Development Bank Raises India’s GDP Growth Forecast

The Asian Development Bank (ADB) has raised India’s GDP growth forecast for the current fiscal year (FY25) to 7% from the previous estimate of 6.7%. This growth will be driven by robust investment in public and private sectors, as well as an improvement in consumer demand. For the 2025-26 fiscal, ADB has projected India’s growth at 7.2%. The growth estimates for the current fiscal are lower than the 7.6% estimated GDP expansion in 2022-23 fiscal, where strong investment was the primary driver.

ADB’s Outlook on India’s Economy

  • India will remain a “major growth engine” in the Asia and Pacific (APAC) region, according to the ADB.
  • Growth will be robust despite moderating in FY2024 and FY2025.
  • The triggers for growth in FY2024 will come from higher capital expenditure on infrastructure development, rise in private corporate investment, strong service sector performance, and improved consumer confidence.
  • Growth momentum will pick up in FY2025, backed by improved goods exports and an increase in manufacturing productivity and agricultural output.

Risks to India’s Economic Outlook

  • Unanticipated global shocks such as supply line disruptions to crude oil markets and weather shocks that impact agriculture output are key risks.
  • The overall health of the banking sector remains robust, with the sector continuing to show improved asset quality.

ADB’s Outlook for Developing Economies in Asia and the Pacific

  • ADB forecast GDP to expand by 4.9% on average this year for developing economies in Asia and the Pacific.
  • The region continues to show resilient growth amid robust domestic demand, improving semiconductor exports, and recovering tourism.
  • However, policymakers should remain vigilant as there are risks such as supply chain disruptions, uncertainty about US monetary policy, the effects of extreme weather, and further property market weakness in China.

Important takeaways for all competitive exams

  • ADB Headquarters: Mandaluyong, Philippines;
  • ADB Founded: 19 December 1966;
  • President of the ADB and the Chairperson of ADB’s Board of Directors: Masatsugu Asakawa.

Asian Development Bank Raises India's GDP Growth Forecast_4.1