ADB Maintains India’s FY25 Growth Forecast at 7%, Anticipates 7.2% Growth in FY26
The Asian Development Bank (ADB) has maintained its forecast for India’s economic growth at 7 percent for the current fiscal year (FY25), while projecting a faster growth rate of 7.2 percent in FY26. This forecast, released in ADB’s report on September 25, aligns with the Reserve Bank of India’s (RBI) prediction for 7 percent growth in FY25.
“India’s economy has demonstrated remarkable resilience amid global geopolitical challenges and is poised for steady growth,” said Mio Oka, ADB’s country director for India.
The ADB report also noted that a strong monsoon across most regions of the country will drive agricultural growth, benefiting the rural economy in FY25.
Inflation Outlook:
The report highlighted a faster-than-expected rise in inflation, with the September outlook predicting inflation to reach 4.7 percent in FY24, up from the 4.6 percent forecast in April. Rising food prices, despite higher agricultural output expectations, are likely to prevent India’s central bank from adopting a more accommodative monetary policy. Inflation is expected to ease to 4.5 percent in FY26.
Current Account Deficit:
The ADB projected India’s current account deficit to widen to 1 percent in FY25 and further to 1.2 percent in FY26. The report also noted risks from global geopolitical shocks affecting supply chains and weather-related disruptions to agricultural output.
