ADB sticks to India’s GDP growth estimates

The Asian Development Bank is sticking to its growth forecast for India and is optimistic that growth will pick up on the back of several factors, including an improving global economy.

“We are optimistic of India achieving 7% growth in 2017 and 7.4% in 2018. There has been a front-loading of capital expenditure and consumption trend is being sustained and external environment is turning favourable,” Sabyasachi Mitra, deputy country director at ADB told a news conference.

Growth is expected to slow in the current financial year as the impact of demonetisation and roll-out issues linked to GST hurt expansion. But most economists and multilateral agencies expect growth to accelerate in the years ahead. The Manila-based multilateral agency had lowered India’s growth estimates for 2017 due to the short term impact of demonetisation.

The Central Statistics Office will publish the data for July-September on November 30. Growth slowed to three-year low of 5.7% in the April-June quarter, triggering criticism over the handling of the economy. But since then a string of goods has bolstered the confidence of policymakers. Global rating agency Moody’s Investor Service raised the country’s sovereign rating, while India improved its position significantly in the World Bank’s Ease of Doing business ranking.

ADB country director Kenichi Yokoyama said the agency plans to raise its annual funding to India to $4 billion from existing $2.7 billion next year. He said this would be done to “accelerate inclusive economic transformation of India.

“The other priority pillars include increasing annual funding to low income states and climate change,” he said.

No comments: