New Delhi: The Asian Development Bank (ADB) on Tuesday downgraded its growth forecast for India to 7.4 per cent for current fiscal against earlier estimate of 7.8 per cent on weak demand and “delayed reforms.” “Economic slowdown in industrial countries, weak monsoon, and stalled action on some key structural reforms will see India’s growth for the current fiscal year fall short of earlier estimates, but still remain robust,” said ADB in a report. For next fiscal growth is now seen at 7.8 per cent below the earlier forecast of 8.2 per cent, it said.
“In addition to slower than anticipated global growth, the revisions reflect expectations that reforms and improved investor confidence needed to bolster the economy could be months away and could still be set back by potential global market turmoil,” said ADB chief economist Shang-Jin Wei. “On the upside, inflation is trending down, crude oil import prices have fallen sharply, and tax revenue and net foreign direct investment inflows are up, which augurs well for a bounce back in the economy.”
ADB said that slowdown in GDP growth in the first quarter was on the back of a slide in growth of consumption, manufacturing and services, with exports contracting significantly due to lower oil prices and lackluster demand.
