: As per the Asian Development Outlook, the Asian Development Bank (ADB) has revised India’s GDP growth forecast for the current fiscal year to 7%, up from its earlier projection of 6.7%.
Key highlights of the report:
- ADB’s April 2024 edition of the Asian Development Outlook projects India’s growth at 7.2% for the 2025-26 fiscal, reaffirming its position as a major growth engine in the region.
- Despite a moderation in growth for the FY2024 and FY2025, India’s economic momentum remains robust.
Factors Driving Growth:
- Strong investment, particularly in infrastructure, has been a key driver of GDP expansion in recent years.
- The government’s emphasis on fiscal consolidation alongside infrastructure development initiatives has bolstered economic prospects.
- Improving consumption demand and manufacturing momentum are further propelling growth.
Projections and Forecasts:
- ADB’s growth estimates align with projections by the Reserve Bank of India (RBI), indicating a collaborative outlook.
- The current fiscal’s growth forecast stands at 7%, attributed to factors like normal monsoon expectations and sustained momentum in manufacturing and services sectors.
Medium-term Outlook:
- Growth momentum is anticipated to accelerate in FY2025, driven by enhanced goods exports and increased productivity in manufacturing and agriculture.
- Efforts towards boosting exports and integrating into global value chains are highlighted as essential for sustained growth.
Policy Measures and Implications:
- Fiscal policies targeting consolidation while supporting capital investment are expected to sustain growth.
- Monetary policies are likely to remain accommodative, facilitating credit off-take and industry sentiment.
- Infrastructure investment, private sector participation, and fiscal prudence are identified as critical for India’s economic resilience.
Challenges and Risks:
- External factors such as global supply disruptions and weather-related shocks pose risks to India’s economic outlook.
- However, the banking sector’s improved asset quality and resilient performance contribute positively to overall economic health.
Regional Context:
- ADB forecasts an average GDP expansion of 4.9% for developing economies in Asia-Pacific, driven by domestic demand and export recovery.
About ADB:
- The ADB is a regional bank that promotes economic and social development in Asia.
- Established in 1966, ADB, is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.
- ADB has 68 member countries (Including India), 49 of which are from the Asia and Pacific region.
- The ADB supports economic development projects in developing member countries in the Asia-Pacific region through loans, technical assistance, grants, and equity investments.
- HQ: Manila, Philippines.
- Last shareholders: Japan, United States, People’s Republic of China, India and Australia, respectively.
- Other notable reports include the Asia-Pacific Trade Facilitation Report 2024 and the Asia Bond Monitor.
Ref:Source
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