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India’s economy has shown impressive strength despite global challenges, and it is set for steady growth, according to Mio Oka, the Asian Development Bank (ADB) Country Director for India. The ADB projects a 7% growth for India in the current fiscal year, boosted by better agricultural output and increased government spending.
In its latest report, the ADB’s Asian Development Outlook (ADO) update from September states that exports this fiscal year will exceed earlier predictions, particularly due to a rise in services exports. However, growth in merchandise exports is expected to be slower in the coming year.
The ADB anticipates GDP growth of 7% for the fiscal year 2024, which ends on March 31, 2025, and 7.2% for FY2025, as previously estimated in April 2024. India’s economy grew by 8.2% in the last fiscal year (2023-24), and the Reserve Bank of India (RBI) forecasts a growth rate of 7.2% for the current year.
Although GDP growth slowed to 6.7% in the first quarter (April-June) of FY2024, it is expected to pick up in the following quarters due to improvements in agriculture and a strong outlook for industry and services.
Mio Oka emphasized that India has shown great resilience amid global challenges and is ready for steady growth. He noted that better agricultural performance will boost rural spending, which, combined with strong industry and services performance, will support economic activity.
The report also mentions that an above-average monsoon in many regions will lead to strong agricultural growth, benefiting the rural economy in FY2024. Private consumption is likely to rise, driven by increased rural spending from better agriculture and already strong urban consumption.
The outlook for private investment is positive, but growth in public capital spending, which has been high, is expected to slow down in FY2025.
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