Indian economy: ADB projects growth of 7.5% in FY23, 8% in FY24

Virendra Pandit

New Delhi: Asian Development Bank (ADB) on Wednesday projected a 7.5 percent growth in the Indian economy in 2022-23 and upgraded it to 8 percent in FY24.

The bank also projected a slower 7 percent collective growth for South Asian economies in 2022, before picking up to 7.4 percent in 2023.

Releasing its flagship Asian Development Outlook (ADO) 2022, the Manila-based multilateral funding agency said the subregion’s growth dynamics are largely driven by India and Pakistan.

Pakistan’s growth is forecast to moderate to 4 percent in 2022 on weaker domestic demand from monetary tightening and fiscal consolidation before picking up to 4.5 percent in 2023, it said.

ADB said developing Asia’s economies are predicted to grow by 5.2 percent this year and 5.3 percent in 2023, because of a robust recovery in domestic demand and continued expansion in exports.

“However, uncertainties stemming from the Russian invasion of Ukraine, the continuing coronavirus (Covid-19) pandemic, and tightening by the United States Federal Reserve pose risks to the outlook,” ADB Outlook said.

Developing Asia comprises 46 member countries of ADB by geographic groups: the Caucasus and Central Asia, East Asia, South Asia, Southeast Asia, and the Pacific.

South Asia comprises Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.

“Economies in developing Asia are finding their footing as they slowly emerge from the worst of the Covid-19 pandemic,” said ADB Chief Economist Albert Park.

However, geopolitical uncertainty and new Covid-19 outbreaks and virus variants could derail this momentum.

“Governments in the region will need to remain vigilant and prepared to counter these risks. That includes making sure as many people as possible are fully vaccinated against Covid-19. Monetary authorities should also continue to monitor their inflation situation closely and not fall behind the curve,” Park added.