While ADB predicts a 0.4% point drop from the April forecast, it has also lowered its forecast for the next financial year.
Amid concerns across the over India’s slipping GDP growth and stagnating job market, the Asian Development Bank on Tuesday downgraded its growth projection to 7% for the current fiscal. While ADB predicts a 0.4% point drop from the April forecast, it has also lowered its forecast for the next financial year.
In the Asian Development Outlook 2017 update, the ADB mentioned, “India’s GDP growth is downgraded to 7% in financial year 2017-18, a 0.4 percentage point drop from the April forecast. In financial year 2018-19, the forecast is adjusted down to 7.4%, from 7.6%.”
However, the multilateral lender said that India continues to have a strong growth despite the implementation of the demonetization and the new Goods and Service Tax (GST) regime, which directly affected consumer spending and business investment. ADB asserted that the disruptions caused by the newly introduced policy reforms will gradually dissolve and growth dividends will be generated over the medium term.
The recently released ADB report also mentioned that broad-based recovery in global trade, robust expansion in major industrial economies and improved prospects of China will help developing Asia in the growth metrics. It stated that these factors will push growth in developing Asian countries for 2017 and 2018.
ADB Chief Economist Yasuyuki Sawada said, “Countries in developing Asia should take advantage of favourable short-term economic prospects to implement productivity-enhancing reforms, invest in badly needed infrastructure, and maintain sound macroeconomic management to help increase their long-term growth potential.”
Days back, predicting a strong global growth by the end of the year, World Bank President Jim Kim asserted that the Indian economy is growing “pretty robustly”. Kim also called for more cooperation among the multilateral system, private sector and the government to make use of the positively growing situation.
Addressing the Bloomberg Global Business Forum, Kim said, “That dormant capital will earn a higher return, where the developing countries will have access to much more capital for the infrastructure needs, even for investing in health and education, investing in resilience to climate change and other factors.”