## India's Robust Growth Projected to Continue, Driven by Investment and Consumption
The Asian Development Bank (ADB) has revised its GDP growth forecast for India upwards, projecting a 7% expansion for the current fiscal year. This upward revision from the previous 6.7% estimate reflects India's robust growth trajectory, fueled by strong investment in both public and private sectors, alongside an improvement in consumer demand.
In its April edition of the Asian Development Outlook, ADB highlights India's position as a "major growth engine" within the Asia and Pacific region. This robust growth is expected to continue in the coming years, with ADB projecting a 7.2% growth rate for the 2025-26 fiscal year.
While the current fiscal year's growth estimate is lower than the 7.6% expansion witnessed in 2022-23, ADB attributes this primarily to strong investment driving GDP growth during that period, while consumption remained muted.
The triggers for continued growth in FY2024 are identified as increased capital expenditure on infrastructure development by both central and state governments, a rise in private corporate investment, a strong service sector performance, and improved consumer confidence.
Furthermore, growth momentum is expected to pick up in FY2025, supported by improved goods exports, increased manufacturing productivity, and agricultural output.
Despite global headwinds, India's strong domestic demand and supportive policies position it as the fastest-growing major economy, according to ADB Country Director for India, Mio Oka.
However, ADB cautions that exports are likely to remain relatively subdued this fiscal year due to slowing growth in major advanced economies, although they are expected to improve in FY2025.
Unforeseen global shocks, such as supply chain disruptions to crude oil markets and weather events impacting agricultural output, are identified as key risks to India's economic outlook.
The overall health of the banking sector remains robust, with improved asset quality and gross non-performing assets declining to a 10-year low of 3.2% at the end of September 2023.
For developing economies in Asia and the Pacific, ADB forecasts an average GDP expansion of 4.9% this year, driven by resilient growth fueled by robust domestic demand, improving semiconductor exports, and recovering tourism.
However, ADB emphasizes the need for policymakers to remain vigilant in the face of potential risks, including supply chain disruptions, uncertainty surrounding US monetary policy, the effects of extreme weather events, and further weakness in China's property market.