ADB raises India’s 2014 growth forecast to 5.5% from 4.7% earlier

 

Manila: India’s growth is forecast to accelerate to 5.5% in 2014, much faster than the 4.7% forecast in December, the Asian Development Bank (ADB) said on Monday in its Asian Development Outlook 2014.

 

Further ahead, India’s GDP will probably expand 6% in 2015 compared with 5.5% in the previous year, said ADB, adding that the third largest Asian economy was still operating below potential which can be solved by clearing investment bottlenecks. 

 

Developing Asia is poised to sustain its current growth momentum and is well positioned to manage risks coming from a slightly slower Chinese economy and possible uneven demand from major industrialized nations, ADB said.

 

Asian nations can undertake preemptive measures to protect the region’s growing economy from unpredictable capital inflows, said the Manila-based lender as it unveiled its forecasts for the region for 2014 and 2015.

 

The bank said it expects the region, grouping 45 counties in Asia-Pacific, to grow 6.2% this year, slightly faster than its most recent estimate of 6% in December, before accelerating further to 6.4% in 2015.

 

“Most regional economies have strengthened their economic fundamentals. Looking ahead, strengthening macroprudential measures before the boom can help avert sudden capital reversals that accompany the bust,” ADB said in its Asian Development Outlook 2014.

 

While risks to the region’s growth outlook have eased, further shock to global financial markets from the US tapering of stimulus and expected policy tightening, an uneven recovery in developed economies, and the possibility of slower growth in China as it aims to curb credit expansion would weigh on the region’s economic uptrend, the bank said.

 

Growth in China is expected to be 7.5% this year, ADB said, slower than its December forecast of 7.7%, and will likely lose momentum further to 7.4% in 2015 as the country pursues policies aimed at more equitable, balanced and sustainable growth.

 

Improving global trade conditions will help lift Southeast Asia’s growth to 5% this year, slightly higher than a previous estimate of 4.8%, with Malaysia, Singapore and Vietnam leading the way. Political unrest will continue to restrain growth in Thailand, with the economy picking up speed only in 2015, ADB said.

 

The bank also said inflation in Asia is expected to be largely steady with global commodity prices remaining soft. Possible upside risks are likely from adjustments in subsidised fuel and power rates

Ranjay Kumar

Pgdm,1st Year

Source:-mint