ADB raises growth forecast for developing Asia to 5.0 per cent, calls India as the region’s fastest-growing economy

New Delhi [India], July 18 (ANI): The Asian Development Bank (ADB) has kept the Indian economic growth forecast unchanged at 7 percent for the fiscal year 2024 in the latest Asian Development Outlook.

ADB also called India the region’s fastest-growing economy. It noted that robust growth is expected in India’s industrial sector, driven by manufacturing and strong construction demand. The agriculture sector in the country is anticipated to rebound due to forecasts of an above-normal monsoon, and investment demand remains strong, led by public investment.

The ADB has also slightly raised its economic growth forecast for developing Asia and the Pacific this year to 5.0 percent, up from a previous projection of 4.9 percent.

According to the organization, this adjustment is attributed to rising regional exports and resilient domestic demand. The growth outlook for next year remains at 4.9 percent.

The inflation rate is also expected to slow to 2.9 percent this year due to easing global food prices and the lingering effects of higher interest rates.

The ADB noted that following a post-pandemic recovery primarily driven by domestic demand, rebounding exports are now contributing to the region’s economic growth. Strong global demand for electronics, particularly semiconductors used in high-technology and artificial intelligence applications, is boosting exports from several Asian economies.

“Most of Asia and the Pacific is seeing faster economic growth compared with the second half of last year. The region’s fundamentals remain strong, but policymakers still need to pay attention to several risks that could affect the outlook, from uncertainty related to election outcomes in major economies to interest rate decisions and geopolitical tensions,” said ADB Chief Economist Albert Park.

The ADB also highlighted that while regional inflation is moderating towards pre-pandemic levels, price pressures remain elevated in some areas. Food inflation remains high in South Asia, Southeast Asia, and the Pacific, partly due to adverse weather and food export restrictions in certain economies.

The growth forecast for the People’s Republic of China (PRC), the region’s largest economy, is maintained at 4.8 percent this year. A continued recovery in services consumption and stronger-than-expected exports and industrial activity are supporting the expansion, despite the PRC’s struggling property sector, which has yet to stabilize. In May, the government introduced additional policy measures to support the property market.