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ADB boosts India’s growth projection to 7% from 6.7%.

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In New Delhi, the Asian Development Bank (ADB) revised its growth forecast for India upward to 7 percent for the current year, up from the previous estimate of 6.7 percent. The adjustment reflects a strengthening investment climate and improved consumption demand within the country. The ADB also predicts a 7.2 percent expansion for next year. Additionally, it anticipates inflation to hover around 4.6 percent in 2024.

Previously, the ADB had projected a 7.6 percent growth rate for the Indian economy last year. The agency emphasized that the economic outlook for India is contingent upon factors such as price and financial market stability, crucial for both consumer and business confidence. It cautioned that negative global shocks, such as supply disruptions in crude oil markets leading to heightened energy costs and global inflation, could prompt central banks to tighten financial conditions, impacting India as well.

While weather-related shocks may affect demand and inflation, particularly due to agricultural under-performance, the ADB highlighted potential upsides stemming from faster-than-expected Foreign Direct Investment (FDI) inflows, particularly in the manufacturing sector, where numerous companies have announced projects. These inflows are expected to not only boost output but also enhance productivity. Additionally, better-than-anticipated global growth could bolster exports and overall economic expansion for India.

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