ADB retains India's growth forecast at 6.4% for current fiscal

ADB retains India's growth forecast at 6.4% for FY22-23 and 6.7% for FY23-24. Inflation expected to decline to pre-pandemic levels. Domestic demand and services driving growth, while industrial activity and exports remain weak. Global outlook for next year has worsened.

The Asian Development Bank (ADB) on Wednesday, July 19, 2023, retained India's economic growth forecast at 6.4 per cent for the current financial year and 6.7 per cent for the next, saying robust domestic demand will continue to support the region's recovery.

In an update to its Asian Development Outlook, the ADB said inflation is expected to continue to fall, approaching pre-pandemic levels as fuel and food prices decline. It forecast 3.6 per cent inflation this year for developing economies in Asia, and 3.4 per cent in 2024.

Also read: Growth in India is expected to slow to 6.3% in FY2023: World Bank

The Indian economy grew 7.2 per cent in the 2022-23 fiscal ended March 2023.

"Asia and the Pacific continues to recover from the pandemic at a steady pace," ADB Chief Economist Albert Park said.

"Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism. However, industrial activity and exports remain weak, and the outlook for global growth and demand next year has worsened, Park added.

In April, the ADB had projected that India's economic growth is expected to moderate to 6.4 per cent in the current financial year due to tight monetary conditions and elevated oil prices.