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Tuesday, July 16, 2024, 8:46 am

Tuesday, July 16, 2024, 8:46 am

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Simplifying trade procedures can promote exporters.

Asian Development Bank
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The Asian Development Bank (ADB) increased its forecast for India’s GDP growth to 7% for the fiscal year ending March 31, 2025, up from 6.7% previously. The bank cited strong public and private investment, as well as expectations of gradual improvement in consumer demand as the rural economy recovers. The regional multilateral lender predicts India’s GDP would grow by 7.2% in fiscal year 2025-26. The ADB’s latest GDP growth projection is weaker than the 7.6% rate anticipated by India’s National Statistical Office for the year ending March 31. Last year’s increase was also fueled by solid investment, although consumption remained modest. The ADB warned that global factors, such as rising oil costs and high interest rates in the West, might alter its projection. India is expected to be the most affected in Asia by rising interest rates due to the rupee’s sensitivity to western rates. The Centre’s capital expenditure expenditures is expected to increase, but private sector project completions have not kept pace with increased announcements. The ADB’s analysis did not address concerns regarding the quality of India’s national income data or the significant impact of government tax collections on GDP.
The lender overlooked India’s lack of significant structural reforms, especially after the COVID-19 outbreak.
The government’s impressive growth rates have been questioned due to a lack of focus on economic reforms. The ADB’s 2024-25 growth prediction is at danger if consumer spending does not return as expected.

Global firm conducting country risk research. BMI identified a danger to consumer expenditure due to low household savings rates.
The ADB recommends creating large-scale special economic zones with lighter policies to enhance exports, which the Centre should consider. India should prioritise improving its logistics infrastructure and integrating with global supply chains to address challenges in global trade, such as the volatile situation in West Asia and disruptions to the east-west shipping route via the Red Sea.

 

ABHISHEK VERMA

 

 


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