On July 17, 2024, the Asian Development Bank (ADB) released its ‘ Asian Development Outlook (ADO) – July 2024‘ maintaining the Gross Domestic Product (GDP) forecast for the Indian economy at 7% for the Fiscal Year 2024-2025(FY 25).
- For FY26, ADB projects Indian economy growth at 7.2%.
- Inflation is expected to decline to 4.6% in FY25 and 4.5% in FY26.
- Notably, India remains Asia’s fastest-growing economy. Growth in developing Asia accelerated in the first quarter of 2024 on resilient domestic demand and strong export growth, particularly in electronics.
- On the regional front of South Asia, the GDP growth in FY25 will be at 6.3% and for FY26 it is slightly declined to 6.5% from 6.6% projected in April 2024 ADO.
Key Points:
i.Following subdued growth in FY24, agriculture is expected to recover due to above-normal monsoon forecasts.
ii.Investment demand remains robust, driven by strong private sector investments.
iii.The service sector’s growth is projected to outpace merchandise growth in FY25.
- Services exports increased by 4.9% to USD 341 billion in FY24.
v.Merchandise exports saw a decline compared to the previous fiscal year.
vi.The industrial sector is expected to see strong growth, fueled by manufacturing and high demand in construction.
Note: The central government has budgeted Rs 11.1 lakh crore on capex for FY25. ADB also mentioned that the central government’s stronger-than-expected fiscal position could further boost growth.
ADB raises Developing Asia-Pacific’s growth forecast for 2024 to 5%
ADB raised its economic growth forecast for developing Asia and the Pacific for 2024 to 5% from a previous projection of 4.9% projection in April 2024 ADO
- The growth outlook for 2025 is maintained at 4.9 per cent.
- Headline inflation in developing Asia is expected to decrease from 3.3% in 2023 to 2.9% in FY25, stabilizing at 3% in FY26.
Recent Related News:
i.ADB pledged USD 23.6 billion from its own resources in 2023 which also include USD 9.8 billion for climate action, to help Asia and Pacific progress on sustainable development. The amount is raised through loans, grants, equity investments, guarantees and technical support provided to governments and private sector.
ii.On the sidelines of the 2024 International Monetary Fund(IMF) and World Bank Spring meetings which took place in Washington D.C., United States of America (USA) on 20th April 2024, 10 Multilateral Development Banks (MDBs) jointly launched the Global Collaborative Co-financing platform.
- The 10 MDBs are: Asian Infrastructure Investment Bank(AIIB), World Bank Group(WBG), African Development Bank(AfDB), Asian Development Bank(ADB), Council of Europe Development Bank(CEB), European Bank for Reconstruction and Development (EBRD), European Investment Bank(EIB), Inter-American Development Bank(IDB), Islamic Development Bank(IsDB), and New Development Bank(NDB).
About Asian Development Bank (ADB):
President– Masatsugu Asakawa
Headquarters– Manila, Philippines
Members– 68 countries
Establishment– 1966
