New Delhi:
The Asian Development Bank (ADB) on Wednesday maintained India’s growth forecast for the current financial year 2024-25 at seven percent. ADB said that the economy is expected to pick up in the coming quarters due to better agricultural production and higher government expenditure.
In its Asian Development Outlook (ADO) for September, ADB said that exports in the current financial year 2024-25 will be higher than previously estimated, thanks to the increase in services exports. However, merchandise export growth will be relatively slow in the next financial year 2025-26.
Indian economy to grow at 8.2% in 2023-24
The Indian economy grew at a rate of 8.2 percent in the last financial year 2023-24. The Reserve Bank of India (RBI) has projected a growth of 7.2 percent in the current financial year. It said, gross domestic product (GDP) growth slowed to 6.7 percent in the first quarter (April-June) of the current financial year, but it is expected to pick up in the coming quarters due to improvement in agriculture and a largely strong outlook for industry and services.
Private investment outlook is positive
According to ADB, private consumption is expected to improve. This will be mainly due to strong agriculture-driven rural demand and already strong urban demand. The outlook for private investment is positive, but the growth in public capital expenditure, which has been high so far, will slow down in the next financial year.
“The recently announced policy offering employment-linked incentives to workers and companies may boost labour demand and create more job opportunities in the next fiscal year,” it said.
Inflation is expected to be higher than previously estimated in the current financial year
Industry and services are expected to continue to perform strongly. Strong service exports and capital inflows will moderate the current account deficit. Inflation is expected to be higher than previously estimated in the current financial year due to increased food prices, although it is expected to ease in the next financial year.
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