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Changes in US trade, fiscal and immigration policies could hit growth and add to inflation in developing Asia and the Pacific (APAC), the latest edition of Asian Development Outlook (ADO) noted.
APAC economies are projected to grow at 4.9 per cent this year, slightly below ADB's September forecast of 5 per cent, the multilateral development bank’s report said.
Expected US policy changes under the incoming administration of President-elect Donald Trump are likely to affect the region's long-term outlook.
The Reserve Bank of India (RBI) also significantly lowered the growth projection for current fiscal recently to 6.6 per cent from 7.2 per cent earlier and hiked the inflation forecast to 4.8 per cent in view of slowdown in economic activity as well as stubborn food prices.
India's GDP growth fell to a seven-quarter low of 5.4 per cent in the second quarter (Q2) of FY25 as against RBI's own projection of 7 per cent.
The country’s growth will stay robust, with the economy supported by higher agriculture output resulting from the summer crop season; continued resilience of the services sector; and lower-than-expected Brent crude prices in 2024 and 2025, ADB said.
Strong forward-looking and labour market indicators and the central’s bank's industrial outlook suggest that economic momentum in India will recover in the coming quarters, it added.
Fibre2Fashion News Desk (DS)