Asian Development Bank has raised Indian economic growth forecast to 5.5% for 2014 from 4.7 percent projected earlier. In its Asian Development Outlook 2014, the bank has noted that India’s GDP will probably expand 6% in 2015 compared with 5.5% in the previous year adding that the third largest Asian economy was still operating below potential which can be solved by clearing investment bottlenecks. Meanwhile, Indian economy’s growth slowed down to a decade low at 4.5 percent in FY13 and 4.6 percent during the first three quarter of FY14.
Referring to the outlook for Asian countries, the ADB stated that developing Asia is poised to sustain its current growth momentum and is well positioned to manage risks coming from a slightly slower Chinese economy and possible uneven demand from major industrialized nations. Further, Asian nations can undertake preemptive measures to protect the region’s growing economy from unpredictable capital inflows. ADB expected the Asia-Pacific region a group of 45 counties, to grow 6.2% during 2014 slightly faster than its most recent estimate of 6% in December and further accelerated to 6.4% in 2015.
Further, Asian Development Outlook 2014 highlighted that risks to the region’s growth outlook have eased as most regional economies have strengthened their economic fundamentals. Though, the factors like uncertainty in global financial markets due to US Fed tapering of stimulus and expected policy tightening, an uneven recovery in developed economies and the possibility of slower growth in China as it aims to curb credit expansion would weigh on the region’s economic uptrend. The ADB further added that inflation in Asia is expected to be largely steady at 3.6% with global commodity prices remaining soft, however possible upside risks are likely from adjustments in subsidised fuel and power rates in some countries.
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