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The Asian Development Bank (ADB) on Thursday upgraded India’s gross domestic product (GDP) growth forecast for 2024-25 (FY25) to 7 per cent from 6.7 per cent earlier, citing better prospects of robust public and private investment and strong services sector growth.  

However, it said unanticipated global shocks, such as supply line disruptions to crude oil markets and weather shocks that impact agriculture output, are key risks to India’s economic outlook.

with forecasts for an above-normal monsoon, will be important to sustain economic growth in rural areas. It said that investment demand led by public investment remains strong.

“Bank credit is fueling robust housing demand and improving private investment demand. However, export growth will continue to be led by services, with merchandise exports showing relatively weaker growth,” said ADB.

 

It said that the forward-looking services purchasing managers' index is well above its long-term average.

The International Monetary Fund on Tuesday raised India’s GDP growth projection for FY25 by 20 basis points to 7 per cent in its update to the World Economic Outlook amid a boost in private consumption, especially in rural areas

For FY26, ADB maintained India’s GDP growth projection at 7.2 per cent, as stated in its April outlook.