ADB projects 7 % growth for Indian economy in 2024-25
Report
3 min read
The Asian Development Bank, in its latest report, Asian Development Outlook, released in September 2024, has projected a growth rate of 7 per cent for the Indian economy in 2024-25 and 7.2 per cent in 2025-26.
The ADB's forecast is in line with the World Bank and the International Monetary Fund’s forecast of 7 per cent growth for the Indian economy in 2024-25.
The Reserve Bank of India(RBI) has projected the Indian economy's growth rate of 7.2 per cent in 2024-25.
ADB Bullish on the Indian Economy
According to the ADB’s latest report, despite global challenges, the Indian economy has shown remarkable resilience. The report certain positive factors which will help the Indian economy to maintain its growth momentum
Positive factors for the Indian economy
- The average monsoon in the country is expected to stimulate strong agricultural growth, which will boost rural purchasing power;
- The government initiative to provide employment-linked incentives for workers and companies could boost labour demand and facilitate job creation;
- It expects private investment and urban consumption to be strong in the country;
- The industrial and service sectors will maintain its growth momentum;
- The current account deficit (export-import of merchandise goods and services) is expected to be 1 per cent of GDP in 2024-25 and 1.2 per cent in 2024-25 due to better exports, lower imports, and strong remittance inflows.
Possible Concern Areas for the Indian Economy
- Inflation: Due to high food prices, the bank expects inflation, as measured by the Consumer Price Index, to be 4.7 per cent in 2024-25. This will limit the RBI’s ability to reduce its policy repo rates.
- Geopolitical tension: An increase in geopolitical tension in the region, like the Israel-Hamas war, etc, can disrupt the global supply chain and increase commodity prices, negatively affecting India.
- Climate Related: Any adverse climate-related challenges can hurt India’s agricultural production. It can increase food inflation and reduce purchasing power in rural areas.
Headquarters of ADB: Mandaluyong City, Metro Manila, Philippines
Members: 68 members
President : Masatsugu Asakawa
