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Context

• ADB released the Asia Development Outlook Report.

Details

Growth Forecast

• The Asian Development Bank (ADB) has revised India's GDP growth forecast for FY 2024 to 7% and 7.2% for FY 2025, citing robust public and private investment and a strong services sector.
• Factors Driving Growth: Higher capital expenditure on infrastructure development, increased private corporate investment, strong service sector performance, and improved consumer confidence are key drivers of growth.

Drivers of Growth

• Public and Private Investment: A significant rise in central government capital expenditure and transfers to state governments is expected to boost infrastructure investment. Stable interest rates are likely to spur private corporate investment.
• Services Sector Performance: Demand for financial, real estate, and professional services is projected to grow, contributing to overall economic expansion.
• Agriculture Sector Growth: Expectations of a normal monsoon are anticipated to boost agricultural output, further fueling economic growth.

Government Initiatives and Policies

• Infrastructure Development: Government efforts to boost infrastructure development and provide an enabling business environment are expected to enhance manufacturing competitiveness and drive future growth.
• Fiscal Consolidation: The government's focus on fiscal consolidation, with targeted deficits for FY 2024 and FY 2025, aims to reduce gross marketing borrowing and create room for private sector credit.

Risks and Challenges

• Global Shocks: Unanticipated global shocks, such as supply disruptions in crude oil markets and weather-related impacts on agriculture output, pose risks to India's economic outlook.
• Foreign Investment and Exports: Tight global financial conditions may affect foreign direct investment in the near term, while lower growth in advanced economies could impact goods exports.

ADB's Commitment

• Inclusive Growth: ADB is dedicated to achieving prosperity, inclusivity, resilience, and sustainability in Asia and the Pacific, with ongoing efforts to eradicate extreme poverty.
• Established in 1966, ADB is owned by 68 members, with a mission to support regional development and cooperation.

ALL ABOUT ADB: https://www.iasgyan.in/daily-current-affairs/asian-development-bank-adb

PRACTICE QUESTION Q. Which of the following statements regarding the Asian Development Bank (ADB) is/are correct? 1. The bank admits the members of the UN Economic and Social Commission for Asia and the Pacific. 2. China controls the highest number of shares, which is about 15.5% of the ownership of the bank. 3. India is a founding member of ADB. Options A) 1 only B) 1and 2 only C) 1 and 3 only D) 3 only Answer: C) 1 and 3 only