Asian Development Bank raises India's GDP growth forecast for FY25 to 7%

After the International Monetary Fund (IMF), World Bank and Moody’s, the Asian Development Bank (ADB) has revised India's GDP growth forecast for FY25 upwards to 7% from the previous estimate of 6.7%. 

The ADB’s growth forecast for FY25 is in line with the projections made by the Reserve Bank of India (RBI). 

Why has ABD increased India’s GDP growth forecast?

This adjustment is attributed to strong demand for public and private sector investment, alongside gradual improvements in consumer demand. Inflation is anticipated to decline in line with global trends.

Looking ahead, the ADB forecasts a growth rate of 7.2% for FY26, anticipating subdued exports in FY24-25 due to slowdowns in major advanced economies, though an improvement is expected in FY25.

To enhance export prospects in the medium term, the ADB underscores the need for greater integration into global value chains.

Additionally, the ADB projects positive growth prospects for most of developing Asia outside China, with inflation easing and consumer demand remaining strong. However, risks persist, including geopolitical tensions and uncertainties surrounding the Federal Reserve's policy and China's property market.

ADB's revised forecasts, along with those from Moody's, the IMF, and the World Bank, signal optimism for India's economic trajectory amidst a challenging global landscape.

Source: Livemint, Firstpost