India's economy to grow by 7.5% in FY23; to pick-up to 8% in next fiscal: Report

Asian Development Bank projected a seven per cent collective growth for South Asian economies in 2022, with India, the subregion’s largest economy, growing by 7.5 per cent in the current fiscal year before picking up to eight per cent the next year.

Releasing its flagship Asian Development Outlook (ADO) 2022, the Manila-based multi-lateral funding agency said that the growth in South Asia is projected to slow to seven per cent in 2022, before picking up to 7.4 per cent in 2023.

The subregion’s growth dynamics are largely driven by India and Pakistan.

“South Asian economies are expected to expand collectively by seven per cent in 2022 and 7.4 per cent in 2023, with India — the sub-region’s largest economy — expected to grow by 7.5 per cent this fiscal year (FY23) and eight per cent next fiscal year (FY24),” the agency’s ADO report said.

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According to the report, Pakistan’s growth is forecast to moderate to four per cent in 2022 on weaker domestic demand from monetary tightening and fiscal consolidation, before picking up to 4.5 per cent in 2023.

ADB said that developing Asia’s economies are predicted to grow by 5.2 per cent this year and 5.3 per cent in 2023, thanks to a robust recovery in domestic demand and continued expansion in exports.

“However, uncertainties stemming from the Russian invasion of Ukraine, the continuing coronavirus disease (COVID-19) pandemic, and tightening by the United States Federal Reserve pose risks to the outlook,” ADB Outlook said.

Developing Asia comprises 46 member countries of ADB by geographic group: the Caucasus and Central Asia, East Asia, South Asia, Southeast Asia and the Pacific.

South Asia comprises Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.

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“Economies in developing Asia are starting to find their footing as they slowly emerge from the worst of the COVID-19 pandemic,” said ADB Chief Economist Albert Park.

“Governments in the region will need to remain vigilant and prepared to take steps to counter these risks. That includes making sure as many people as possible are fully vaccinated against COVID-19. Monetary authorities should also continue to monitor their inflation situation closely and not fall behind the curve,” Park said.

(With inputs from Agencies)