New Delhi. The Asian Development Bank (ADB) has maintained India’s growth forecast for the current financial year 2024-25 at seven percent. ADB said on Wednesday that the economy is expected to pick up in the coming quarters due to better agricultural production and higher government spending. In its Asian Development Outlook (ADO) of 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, commodity export growth will be relatively slow in the next financial year 2025-26.
ADB said, “GDP growth is expected to be seven percent in FY 2024-25 (year ending March 31, 2025) and 7.2 percent in FY 2025-26. Both estimates are the same as in April 2024. Also, India’s growth prospects remain strong.” 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 rate 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 accelerate in the coming quarters due to improvement in the agricultural sector and a largely strong scenario for industry and services.
ADB India Director Mio Oka said, “India’s economy has shown remarkable resilience amid global geopolitical challenges and is poised for stable growth.” He said, “Agricultural reforms will increase rural spending, which is in line with the effects of strong performance of industry and service sectors.” The report said, “Above average monsoon in most parts of the country will lead to strong growth in the agricultural sector, which will boost the rural economy in FY 2024-25.” The report also expects improvement in private consumption. The main reason for this will be strong agriculture-induced rural demand and already strong urban demand.
The private investment outlook is positive, but growth in public capital expenditure, which has been high so far, will slow down in the next fiscal. It said, the recently announced policy offering employment-linked incentives to workers and companies may boost labour demand and create more jobs in the next fiscal. Industry and services are expected to continue to perform strongly. The current account deficit (CAD) will remain low due to strong service exports and remittances sent by Indians living abroad. 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.
