ADB cuts India’s growth forecast for FY17
Global headwinds will pull down India\'s growth rate to 7.4 per cent in the next fiscal from 7.6 per cent this year but more reforms will help the country remain one of the fastest growing economies in the world, the Asian Development Bank said on Wednesday.
New Delhi : Global headwinds will pull down India's growth rate to 7.4 per cent in the next fiscal from 7.6 per cent this year but more reforms will help the country remain one of the fastest growing economies in the world, the Asian Development Bank said on Wednesday.
The ADB's growth forecast of 7.4 per cent for 2016-17 is substantially lower than its earlier projection of 7.8 per cent. ADB's flagship publication Asian Development Outlook (ADO) also projected rise in consumer inflation, mainly on account of the impact of salary hike of government employees and a likely mild pick up in global oil prices.
"India's economy will see a slight dip in growth in FY16. The economy will again accelerate in FY17 as the benefits of banking sector reforms and an expected pickup in private investment begin to flow," the ADB said. ADB projects India's gross domestic product (GDP) to grow 7.4 per cent in FY16, slightly below the FY15 estimate of 7.6 per cent. In FY17 growth is forecast to reach 7.8 per cent, it said.
As per India's Finance Ministry's estimates, growth is likely to be between 7-7.75 per cent next fiscal year. "India is one of the fastest growing large economies in the world and will likely remain so in the near term," ADB's Chief Economist Shang-Jin Wei said.
"The potential growth of the country can be raised further if it can successfully implement necessary reforms including unifying the tax regime, improving labour market regulations as opening further to foreign direct investment and trade," Wei said.