The Asian Development Bank (ADB) has raised India’s GDP growth forecast for the current fiscal to 7 per cent, up from 6.7 per cent earlier. The ADB cited robust growth driven by public and private sector investment, as well as an improvement in consumer demand.
In its April edition of the Asian Development Outlook, the ADB stated that India would remain “a major growth engine” in the Asia and Pacific region. The forecast for the 2025-26 fiscal year is even more optimistic, with ADB projecting India’s growth at 7.2 per cent.
Despite a slight moderation in growth for the fiscal years 2024 and 2025, the ADB remains confident in India’s economic trajectory. The growth estimates for the current fiscal year are slightly lower than the 7.6 per cent GDP expansion seen in the 2022-23 fiscal year.
The ADB highlighted strong investment as a key driver of GDP growth in the previous fiscal year, with consumption remaining muted. The institution also noted that India remains the fastest-growing major economy, supported by strong domestic demand and favorable policies.
Looking ahead, the ADB expects growth momentum to pick up in fiscal year 2025, driven by improved goods exports, increased manufacturing productivity, and agricultural output. The institution emphasized the need for greater integration into global value chains to boost exports in the medium term.
Overall, the ADB’s positive outlook for India’s economy reflects a combination of strong investment, improving consumer confidence, and supportive policies. With inflation expected to moderate and fiscal consolidation efforts underway, India’s economic prospects appear promising in the coming years.