The Asian Development Bank (ADB) has maintained its Indian economic growth forecast at 7 percent for the fiscal year 2024 in its latest Asian Development Outlook. India is recognized as the region’s fastest-growing economy, with robust growth expected in the industrial sector driven by manufacturing and construction demand. The agriculture sector is projected to rebound due to predictions of an above-normal monsoon, while investment demand remains strong, especially in public investments. The ADB has slightly increased its economic growth forecast for developing Asia and the Pacific to 5.0 percent, attributing this adjustment to rising regional exports and resilient domestic demand, with the inflation rate expected to slow to 2.9 percent due to easing global food prices and higher interest rates.
The organization noted that following a post-pandemic recovery 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. ADB Chief Economist Albert Park highlighted that while most of Asia and the Pacific are experiencing faster economic growth compared to the previous year, policymakers need to remain cautious of potential risks such as election outcomes, interest rate decisions, and geopolitical tensions. Although regional inflation is moderating towards pre-pandemic levels, price pressures remain high in some areas, particularly in South Asia, Southeast Asia, and the Pacific due to adverse weather conditions and food export restrictions.
The growth forecast for China, the region’s largest economy, remains at 4.8 percent for this year. The country’s continued recovery in services consumption, stronger-than-expected exports, and industrial activity are supporting the expansion, despite ongoing challenges in the struggling property sector. In May, the government introduced additional policy measures to support the property market. Overall, the ADB’s outlook for Asia and the Pacific remains optimistic, with strong fundamentals supporting economic growth, but policymakers are advised to stay vigilant against potential risks that could affect the region’s economic outlook.
