ADB Revises India's GDP Growth Projection for 2022-2023

  • 22 Sep 2023

Recently, the Asian Development Bank (ADB) adjusted India's gross domestic product (GDP) projection for the fiscal year 2022-2023, lowering it from 6.4 percent to 6.3 percent due to factors such as slowing exports and the potential impact of erratic rainfall on agricultural output.

Key Points

  • This adjustment is attributed to concerns over declining exports and the possible adverse effects of irregular rainfall on agriculture.
  • Steady Growth for 2023-2024: The GDP projection for the current fiscal year, 2023-2024, remains at 6.7 percent.
  • This optimism is based on expectations of rising private investment and industrial output driving economic growth during this period.
  • Drivers of Growth: The Asian Development Outlook for September 2023 predicts that India's growth for the remainder of this fiscal year and the next will be primarily propelled by robust domestic consumption due to improving consumer confidence. Investment, including increased government capital expenditure, will also contribute to this growth.
  • Downside Risks: ADB identifies downside risks, including global geopolitical tensions that could create economic uncertainty or lead to a rapid increase in global food prices.
  • Additionally, adverse weather conditions during the kharif (July-October) and rabi (October-April) seasons may further impact agricultural growth.
  • Potential Upside: The report suggests that economic growth in FY25 could surpass expectations if there is a significant increase in foreign direct investment, especially in the manufacturing sector, as multinational corporations diversify their supply chains to include India.