The Asian Development Bank (ADB) has revised its GDP growth forecast for India, projecting a robust 7% growth for the current fiscal year (2023-24), up from the previous estimate of 6.7%. This growth surge is attributed to strong investment from both public and private sectors, alongside a gradual uptick in consumer demand.
While the forecast for FY24-25 is slightly lower at 7.6% compared to the preceding year, the ADB remains optimistic about India’s economic trajectory. Highlighting the nation’s impressive performance in manufacturing and services during FY22-23, the ADB anticipates sustained growth, albeit at a moderated pace, in the following years.
In its report, the ADB outlined, “The economy grew robustly in fiscal 2023 with strong momentum in manufacturing and services. It will continue to grow rapidly over the forecast horizon. Growth will be driven primarily by robust investment demand and improving consumption demand. Inflation will continue its downward trend in tandem with global trends.”
Looking ahead, the ADB projects India’s GDP growth to reach 7.2% for FY25-26. However, it anticipates relatively subdued exports in the current fiscal year due to sluggish growth in major advanced economies, with a gradual recovery expected in FY24-25.
These projections align closely with the Reserve Bank of India’s (RBI) forecasts, which anticipate a 7% GDP growth in FY23-24. The RBI attributes this growth outlook to factors such as a favorable monsoon, easing inflationary pressures, and sustained momentum in manufacturing and services sectors.