Asian Development Bank (ADB) has kept its outlook for India's economic growth unchanged at 7 percent for the current fiscal year while forecasting a weaker-than-previously expected pace for developing Asia.
ADB's 7 percent growth projection for fiscal 2022-23 (April 2022 to March 2023), unchanged from its September forecast, compares to 8.7 percent GDP growth in 2021-22.
For 2023-24, the GDP growth has been kept unchanged at 7.2 percent.
The Manila-based ADB in a report on Wednesday saw Asia expanding 4.2 percent this year before accelerating to 4.6 percent in 2023. These projections compare to the previously estimated expansion of 4.3 percent and 4.9 percent, respectively.
"Despite recent global headwinds, the Indian economy is expected to grow by 7.0 percent, as projected in the Update, supported by a strong domestic base.
"While some recent high-frequency indicators are more favourable than expected -- notably consumer confidence, electricity supply and purchasing managers' indexes -- others are a little less favourable, in particular exports, largely textiles and iron ore, and the index of industrial production of consumer goods," it said.
The growth forecast for 2023-34 is unchanged at 7.2 percent, "sustained by positive effects from structural reform and from public investment catalysing private investment".
Inflation in India is still expected to rise to 6.7 percent in 2022-23 before falling back to 5.8 percent.
"In India, the economy grew by 6.3 percent in Q2 (July-September) of the fiscal year 2022-23, reflecting contraction in public consumption of 4.4 percent even as exports grew by 11.5 percent despite the global slowdown," ADB said.
On the supply side, the increase was led by service sector growth at 9.3 percent, contributing 4.6 percentage points to GDP growth.
Industry, by contrast, suffered a small contraction by 0.8 percent, dragged down by contraction in manufacturing and mining, ADB added.
(With PTI inputs)