The Asian Development Bank (ADB) in its latest edition of Asian Development Outlook (ADO) has said that it lowered India’s economic growth forecast to 6.5 per cent for the current financial year (FY25) from its earlier estimate of 7 per cent due to lower-than-expected growth in private investment and housing demand. It has also lowered India’s growth forecast for 2025-26 financial year.
It however said India’s growth will remain robust, with the economy supported by higher agriculture output resulting from the summer (or kharif) crop season (which will also put downward pressure on food prices); continued resilience of the services sector; and lower-than-expected Brent crude prices in 2024 and 2025.
It further said strong forward-looking and labour market indicators, such as PMI for industry and services, urban labour force participation and Reserve Bank of India’s industrial outlook, suggest that economic momentum will recover in the coming quarters. Besides, it said Asia and the Pacific’s economies are projected to grow 4.9 per cent in 2024, slightly below ADB’s September forecast of 5 per cent.
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