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ADB lowers India’s GDP projection for FY23 to 6.3%; India Ratings revises India’s FY24 GDP growth to 6.2%

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ADB lowers India's GDP projection for FY23 to 6.3%The Asian Development Bank (ADB) in its Asian Development Outlook (ADO) September 2023 lowered India’s gross domestic product (GDP) projection by one percentage point for Fiscal 2022-2023 (FY23) to 6.3% from 6.4% (ADO April 2023 estimate).

  • This down gradation is due to slowing exports, global geopolitical tensions, and the likely impact of erratic rainfall on agriculture output at the time of harvesting of kharif season (July-October) or during the Rabi season(October-April).
  • For FY 2023-2024 (FY24), the GDP projection is retained at 6.7%.
  • In FY25, economic growth could be higher if foreign direct investment(FDI) inflows are larger, particularly in the manufacturing sector.

Key Points:

i.India’s Q1FY24 GDP grew by 7.8% YoY (year on year), driven by robust services and increased investment, fueled by public spending and bank credit to the private sector.

ii.Inflation has decreased to 5.5% in 2023 from 6.7% in 2022 and is expected to further decrease to 4.2% in FY24.

  • This is influenced by government actions like export restrictions on rice, export duties on other rice varieties, buffer stocks of pulses and onions, removal of import duties on pulse imports, and a new cooking gas subsidy.

Developing Asia GDP Projection:

i.ADB also lowered the economic growth forecast for developing Asia to 4.7% in 2023 from 4.8% projected in April 2023 ADO.

ii.The growth forecast for 2024 is unchanged at 4.8%.

iii.Inflation in developing Asia is forecast to decline from 4.4% last year to 3.6% in 2023 and 3.5% in 2024.

  • The decline will be driven by the China, where the inflation forecast is revised down to 0.7%.

Risks to the Outlook

ADB has cited three main risks to the outlook,

i.Impact of the weakness in China’s property sector

ii.Sporadic supply disruptions from Russia’s invasion of Ukraine

iii.Export curbs amid the risk of droughts and floods caused by El Nino.

India Ratings Revises India’s FY24 GDP Growth Estimates to 6.2%

India Ratings and Research (Ind-Ra) revised Indias GDP growth estimate for FY24 to 6.2% from 5.9% projected in February 2023. .

  • This increase is due to the sustained government capital expenditure, deleveraged balance sheet of India Inc and banks, and the prospect of a new private corporate capex cycle.


India Inc is a common term used by the Indian media to refer to the formal (comprising government and corporate) sector of the nation.

Key Points:

i.In the 1st Quarter of FY24 (1QFY24), the quarterly GDP growth was at 7.8% and it is estimated to slow down in the remaining three quarters of FY24.

ii.The Private Final Consumption Expenditure (PFCE) is expected to grow 6.9% in FY24 as against 7.5% in FY23.

iii.Monsoon rainfall and industrial growth are marked as areas of concern.

iv.Retail inflation will soften, and the headline CPI (Consumer Price Index) will come at 5.5% in FY24

Other Recent Projections for India in FY24:

i.As per the Reserve Bank of India’s (RBI) latest forecast, the Indian economy is likely to grow at 6.5% in the FY24.

ii.Organisation for Economic Cooperation and Development (OECD) upped the GDP growth projection for India to 6.3%.

iii.Fitch retained India’s growth forecast at 6.3%

iv.S&P Global Market Intelligence raised it to 6.6%.

About ADO:

i.Asian Development Outlook is the main economic forecasting product from ADB.

ii.It is published each April with an update published in September and brief reports published in July and December.

Recent Related News:

i.During the International Conference on Green Hydrogen (ICGH-2023), three Multilateral Development Banks, the European Investment Bank (EIB), the Asian Development Bank (ADB) and the World Bank have contributed USD 27 billion for India’s Green Growth.

ii.The Reserve Bank of India’s (RBI) Monetary Policy Committee projected GDP growth of 2023-24 at 6.5%.

About Asian Development Bank (ADB):
President– Masatsugu Asakawa
Headquarters– Mandaluyong, Metro Manila, Philippines,
Establishment– 1966