Asian Development Bank (ADB) has lowered growth forecast of India for 2019-20 fiscal to 7.2 per cent from 7.6 per cent estimated earlier. The downgrade has been attributed to moderation in global demand and likely shortfall in revenue on the domestic front. For 2018-19, ADB has cut the growth estimate to 7 per cent from 7.3 per cent projected in December 2018.
“Growth slowed from 7.2 per cent in fiscal 2017 to 7 per cent in 2018, with weaker agricultural output and consumption growth curtailed by higher global oil prices and lower government expenditure … Growth is expected to rebound to 7.2 per cent in 2019 and 7.3 per cent in 2020 as policy rates are cut and farmers receive income support, bolstering domestic demand,” ADB said in its Asian Development Outlook (ADO) 2019 released Wednesday.
This growth will reverse two years of declining trend as reforms to improve the business and investment climate take effect, the ADO said.
The growth forecast for India has some downside risks such as moderation in global demand as financial conditions tighten, uncertainty arising out of global trade tensions, and the weak economic outlook in industrial countries, the report said.
“On the domestic front, growth could suffer if tax revenue falls short or any disruption affects the ongoing resolution of the twin problems of bank and corporate balance sheets,” it added.
India will, however, remain one of the fastest-growing major economies in 2019-20, it said.
“India will remain one of the fastest-growing major economies in the world this year given the strong household spending and corporate fundamentals,” ADB chief economist Yasuyuki Sawada was quoted by PTI as saying.—With PTI