BackADB projects 6.3% growth for India in FY16 on hopes of reform
The Asian funding agency retained its forecast of 5.5% growth for 2014-15
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New Delhi: Manila-based Asian Development Bank (ADB) has upgraded India’s economic growth forecast to 6.3% in 2015-16 on hopes of a speedy reform process.
However, the multilateral funding agency has retained forecast 5.5% growth in India this year.
“With Parliamentary elections over, India is expected to pursue long-delayed reform. India’s growth forecast is maintained at 5.5% in fiscal year 2014-15 but upgraded to 6.3% in fiscal year 2015-16 as expected reform bears fruit," it said in a release.
Earlier, ADB had projected 6% growth for India in the fiscal year.
Pinning hopes on improved outlook for the largest economy (India) in South Asia, it said expansion in the sub-region is expected to reach 5.4% in 2014 and pick up to 6.1% in 2015.
ADB said developing Asia remains on track toward steady growth in 2014 despite slower than expected growth in the US in the first quarter.
“Developing Asia as a region continues to perform well. The pace of the growth moderation in the People’s Republic of China is in line with our expectations while the stage is set for India to pursue reform that could unlock its growth potential," said ADB deputy chief economist Juzhong Zhuang.
ADB said growth in China should achieve the forecast of 7.5% in 2014 and 7.4% in 2015. “East Asia as a whole is similarly paced to meet growth projections of 6.7 per cent in both 2014 and 2015," it said.
In South-east Asia, growth softened in the first half of 2014 largely because of country-specific factors in Indonesia, Thailand, and Vietnam.
“The outlook for the sub-region’s five largest economies is revised down to 4.8% in 2014, dragging the sub-regional forecast to 4.7%, but should rebound in 2015 to 5.6%, or 5.4% across Southeast Asia," it said.
On the price situation, ADB said that declining food prices and relatively stable oil prices are keeping developing Asia’s inflation in check at 3.5% in 2014 and 3.7% in 2015.
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