ADB retains India's growth forecast at 6.4 % for FY24, citing cooling inflation, boost in demand and services activity

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In  the wake of cooling inflation, robust domestic demand and services sector, the Asian Development Bank (ADB) on Wednesday retained India's economic growth forecast at 6.4 per cent for the current financial year. ADB has set growth forecast at 6.7 per cent for India for the next financial year.

In its Asian Development Outlook, the bank noted that the inflation is expected to continue to fall, and is expected to approach to its pre-pandemic levels as fuel and food prices decline.  The bank forecasted 3.6 per cent inflation this year for developing economies in Asia, and 3.4 per cent in 2024. India's economy grew by 7.2 per cent in the 2022-23 fiscal ended in March 2023.

"Asia and the Pacific continues to recover from the pandemic at a steady pace," ADB Chief Economist Albert Park said. The ADB Chief Economist also said that the domestic demand and services activity are driving growth, while many economies are also benefiting from the boost in tourism sector.

He also cited that the outlook for global growth and demand for next year has worsened in the wake of weakness in exports and industrial activity. The ADB, in April, had projected that India's economic growth is expected to moderate to 6.4 per cent in the current financial year because of tight monetary conditions and elevated oil prices.