Reference:

• The Asian Development Bank (ADB) has released its flagship report, Asian Development Outlook (ADO) – April 2025.

Key Points:

• Key Estimates for India: • India’s Gross Domestic Product (GDP) is expected to grow by 6.7% during the current financial year (2025-26).
• Main reasons for this growth include:  Increase in domestic demand: Rising demand in the domestic market will boost the economy.
• Improvement in rural income: Increased income in rural areas will strengthen the rural economy.
• Easing of inflation: A decline in inflation will enhance spending and investment.
• For FY 2026-27, India’s GDP growth is also estimated at 6.8%.
• However, the Reserve Bank of India (RBI) has revised its GDP forecast for the current financial year from 6.7% to 6.5% due to the impact of global trade and policy uncertainties.
• According to the report, India's GDP will grow by 6.7% in 2025-26 (ending on March 31, 2026), driven by strong domestic demand, rising rural income, a robust services sector, and easing inflation, which will boost consumer confidence.

Estimates for Other Regions:

China’s Growth Forecast Decline:

• Weak baseline assumptions already reflect the expected slowdown in China.
• Growth rate was 5.0% in 2024, projected to decline to 4.7% in 2025.
• Further decline expected to 4.3% in 2026.

Slight Decline in Southeast Asia:

• Southeast Asia, which benefited from the US-China trade war (2018), is expected to witness a mild decline in growth.
• Growth rate was 4.8% in 2024, projected to remain at 4.7% in 2025 and 2026.

South Asia: A Bright Spot for Growth

According to ADB, due to strong domestic demand in South Asia:

• Growth rate was 5.8% in 2024
• Estimated to be 6.0% in 2025
• Expected to rise to 6.2% in 2026

Decline in Inflation Forecast:

Due to falling prices of global oil and other commodities:

• Inflation was 2.6% in 2024
• Estimated at 2.3% in 2025
• May further decline to 2.2% in 2026

Asian Development Bank (ADB):