Indian Economy On Track To Grow By 7% In FY24, Says ADB

Growth in developing Asia accelerated in the first quarter of 2024 on resilient domestic demand and strong export growth, particularly in electronics, according to the Asian Development Bank in its July forecast. The regions growth forecast for 2024 is increased slightly to 5.0%, while the 2025 projection is maintained at 4.9%. Headline inflation in developing Asia is now forecast to ease further from 3.3% last year to 2.9% this year, stabilizing at 3.0% in 2025.

Meanwhile, the Indian economy is on track to grow by 7.0% in FY2024 (ending 31 March 2025) and 7.2% in FY2025, as projected in Asian Development Outlook April 2024, the lender said. Services continued to expand robustly in Q4 of FY2023, and the forward-looking services PMI is well above its long-term average. Industry is also expected to grow robustly, driven by manufacturing and strong demand for construction led by housing. After muted growth in FY2023, a rebound in agriculture is expected given the above-normal monsoon projections. This is notwithstanding the slower advance of the monsoon in June. A rebound in agriculture will be important to sustain growth momentum in rural areas. Investment demand continues to be strong, led by public investments. Bank credit is fueling robust housing demand and improving private investment demand. However, export growth will continue to be led by services, with merchandise exports showing relatively weaker growth. The stronger-than-expected fiscal position of the central government could provide a further boost to growth. However, this must be weighed against downside risks arising from weather events and geopolitical shocks, ADB noted.

 

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