The Asian Development Bank (ADB) has trimmed its GDP growth forecast for India by 50 basis points to 7 percent for the current financial year ending in March 2023. The ADB said that elevated commodity prices, including those of oil, and domestic inflation will force Indian monetary policy to continue to tighten. This would hurt growth in the short run, the ADB said. ADB noted that weaker than expected global demand over the next 2 years will also adversely affect exports and growth, despite the structural reforms being undertaken by the government. Nevertheless, the economy is expected to grow strongly over the forecast horizon, with investment playing a catalytic role. For the next financial year ending in March 2024, the ADB has cut its GDP growth estimate for India by an even larger 80 basis points to 7.2 percent.
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