Latest news with #ADB
Economic Times
3 hours ago
- Business
- Economic Times
ADB trims FY26 growth forecast to 6.5% on baseline US duty impact
The Asian Development Bank (ADB) has slightly lowered India's growth forecast for FY26 to 6.5%, citing US tariffs and policy uncertainty. Despite this, India remains a fast-growing major economy, supported by strong consumption and a revival in rural demand. The RBI also projects 6.5% GDP growth for FY26, while ADB anticipates improvement to 6.7% in FY27 with rising investments. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads New Delhi: The Asian Development Bank (ADB) on Wednesday lowered India's growth forecast for FY26 to 6.5% from 6.7% citing the impact of baseline tariffs imposed by the United States and impact of policy uncertainty on the downgrade, India continues to be one of the fastest growing major economies globally. The Reserve Bank of India (RBI) also projected India's gross domestic product (GDP) growth at 6.5% for FY26 from 6.7% earlier. The Indian economy grew by 6.5% in to the July Asian Development Outlook 2025, domestic economic activity remains resilient, supported by strong consumption, particularly from a revival in rural demand. "Services and agriculture sectors are expected to be key drivers of growth, the latter supported by a forecast of above-normal monsoon rains," it Manufacturing and Services Purchasing Managers' Index (PMI) indicates stronger performance in India in the first quarter of this fiscal year, compared to other economies in the Asia Pacific also noted that India's fiscal position remains healthy, aided by higher-than-expected dividends from the RBI. The central government is on track to meet its fiscal deficit reduction comparison, growth projections for China, the largest economy in the region, are unchanged at 4.7% in 2025 and 4.3% in 2026. "Policy stimulus for consumption and industrial activity is expected to offset continuing property market weakness and softening exports," the ADB South Asia, ADB revised the 2025 growth forecast down to 5.9% from 6% estimated in the April outlook."Asia and the Pacific has weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty," said Albert Park, ADB chief economist. "Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment, and growth," he ahead, India's GDP growth is expected to improve to 6.7% in FY27 driven by rising investments, under the assumption of improved policy clarity and favourable financial conditions, following recent monetary easing. "The baseline expectations of lower crude oil prices will also support economic activity in FY2025 and FY2026," said the June, the RBI's monetary policy committee (MPC) cut the repo rate by 50 basis points to 5.5% and reduced cash reserve ratio by 100 bps to 3%, adding ₹2.5 lakh crore in liquidity into the banking next MPC meeting is scheduled for the first week of also revised its inflation forecast for India to 3.8% in FY26 from 4.3% estimated earlier, "reflecting faster-than-expected decline in food prices due to better agricultural production."India Ratings and Research (Ind-Ra) Wednesday revised India's growth forecast for FY26 to 6.3% from the previous estimate of 6.6%, due to tariff hikes by the US and a weaker investment climate. The Indian economy is facing both headwinds and tailwinds."Major headwinds are uncertain global scenario from the unilateral tariff hikes by the US for all countries and weaker-than-expected investment climate," said DK Pant, chief economist and head public finance at Ind-Ra."The major tailwinds are monetary easing, faster-than-expected inflation decline, and likely above-normal rainfall in 2025," he added.
Time of India
3 hours ago
- Business
- Time of India
ADB trims FY26 growth forecast to 6.5% on baseline US duty impact
New Delhi: The Asian Development Bank (ADB) on Wednesday lowered India's growth forecast for FY26 to 6.5% from 6.7% citing the impact of baseline tariffs imposed by the United States and impact of policy uncertainty on investment. Despite the downgrade, India continues to be one of the fastest growing major economies globally. The Reserve Bank of India (RBI) also projected India's gross domestic product (GDP) growth at 6.5% for FY26 from 6.7% earlier. The Indian economy grew by 6.5% in FY25. Explore courses from Top Institutes in Please select course: Select a Course Category Finance Public Policy Data Science Artificial Intelligence Data Science Others MCA Digital Marketing Healthcare PGDM Technology Design Thinking Data Analytics healthcare Leadership MBA Operations Management CXO Product Management Cybersecurity Degree Management others Project Management Skills you'll gain: Duration: 9 Months IIM Calcutta SEPO - IIMC CFO India Starts on undefined Get Details Skills you'll gain: Duration: 7 Months S P Jain Institute of Management and Research CERT-SPJIMR Fintech & Blockchain India Starts on undefined Get Details According to the July Asian Development Outlook 2025, domestic economic activity remains resilient, supported by strong consumption, particularly from a revival in rural demand. "Services and agriculture sectors are expected to be key drivers of growth, the latter supported by a forecast of above-normal monsoon rains," it said. The Manufacturing and Services Purchasing Managers' Index (PMI) indicates stronger performance in India in the first quarter of this fiscal year, compared to other economies in the Asia Pacific region. ADB also noted that India's fiscal position remains healthy, aided by higher-than-expected dividends from the RBI. The central government is on track to meet its fiscal deficit reduction target. Live Events In comparison, growth projections for China, the largest economy in the region, are unchanged at 4.7% in 2025 and 4.3% in 2026. "Policy stimulus for consumption and industrial activity is expected to offset continuing property market weakness and softening exports," the ADB said. For South Asia, ADB revised the 2025 growth forecast down to 5.9% from 6% estimated in the April outlook. "Asia and the Pacific has weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty," said Albert Park, ADB chief economist. "Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment, and growth," he added. Looking ahead, India's GDP growth is expected to improve to 6.7% in FY27 driven by rising investments, under the assumption of improved policy clarity and favourable financial conditions, following recent monetary easing. "The baseline expectations of lower crude oil prices will also support economic activity in FY2025 and FY2026," said the ADB. In June, the RBI's monetary policy committee (MPC) cut the repo rate by 50 basis points to 5.5% and reduced cash reserve ratio by 100 bps to 3%, adding ₹2.5 lakh crore in liquidity into the banking next MPC meeting is scheduled for the first week of August. ADB also revised its inflation forecast for India to 3.8% in FY26 from 4.3% estimated earlier, "reflecting faster-than-expected decline in food prices due to better agricultural production." Ind-Ra cuts FY26 forecast to 6.3% India Ratings and Research (Ind-Ra) Wednesday revised India's growth forecast for FY26 to 6.3% from the previous estimate of 6.6%, due to tariff hikes by the US and a weaker investment climate. The Indian economy is facing both headwinds and tailwinds. "Major headwinds are uncertain global scenario from the unilateral tariff hikes by the US for all countries and weaker-than-expected investment climate," said DK Pant, chief economist and head public finance at Ind-Ra. "The major tailwinds are monetary easing, faster-than-expected inflation decline, and likely above-normal rainfall in 2025," he added.
Time of India
8 hours ago
- Business
- Time of India
Impact of trade war & tariffs: ADB cuts India's FY26 outlook; GDP growth forecast cut to 6.5%
Representative image (ANI) The Asian Development Bank (ADB) on Wednesday lowered its forecast for India's GDP growth for FY26 from 6.7 percent to 6.5 percent, citing uncertainty in global trade and the effect of higher US tariffs on Indian exports and investment flows 'This revision is primarily due to the impact of US baseline tariffs and associated policy uncertainty. In addition to the effects of lower global growth and the direct impact of additional US tariffs on Indian exports, heightened policy uncertainty may affect investment flows,' the ADB said in its July edition of the Asian Development Outlook (ADO), as quoted by news agency PTI. India is still one of the major economies with the fastest rates of growth in the world, even with the downward revision. Economic activity is still robust, according to the ADO, and domestic consumption is predicted to increase significantly due to a recovery in rural demand. In the next fiscal year, the agriculture and services sectors are probably going to be the main engines of growth. The agricultural sector, in particular, is expected to benefit from a forecast of above-normal monsoon rains, according to the news agency. The government's economic survey had earlier projected FY26 growth in the range of 6.3 percent to 6.8 percent. The Reserve Bank of India (RBI), too, recently lowered its own growth forecast for the current financial year from 6.7 percent to 6.5 percent. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Why seniors are rushing to get this Internet box – here's why! Techno Mag Learn More Undo India's economy grew by 6.5 percent in FY25, the slowest expansion in four years, down sharply from 9.2 percent in FY24. The ADB said the centre's fiscal position remains robust, bolstered by higher-than-expected dividend payouts from the RBI. Additionally, it looks like the government will reach its goal of reducing the fiscal deficit. Assuming a more stable policy environment and favorable financial conditions, the report forecasts that growth could recover to 6.7 percent in FY27. Anticipated increases in investment, supported by recent cuts to key policy rates, serve as the foundation for this forecast, reported PTI. Since there are indications that inflation is going to continue to decline, the RBI has decided to adopt a neutral monetary stance, which allows it to change policy rates as needed. Since February of this year, the benchmark repo rate has been lowered by 100 basis points by the monetary policy committee (MPC). In its most recent move last month, the RBI delivered a surprise 50 basis point rate cut, its third consecutive reduction, and slashed the cash reserve ratio (CRR) by a full percentage point to 3 percent. The CRR move alone injected around ₹2.5 lakh crore into the banking system, further supporting liquidity as reported by PTI. Additionally, the ADB said the outlook for FY26 and FY27 is supported by baseline expectations of lower crude oil prices, which should help sustain economic momentum. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Hans India
8 hours ago
- Business
- Hans India
Indian economy largely resilient despite global uncertainties around tariffs: RBI
New Delhi: Despite global uncertainties around tariffs, the Indian economy remains largely resilient, supported by strong macroeconomic fundamentals, the Reserve Bank of India (RBI) said on Wednesday. Easing inflation, improving kharif season prospects, front-loading of government expenditure, targeted fiscal measures, and congenial financial conditions for faster transmission of rate reductions should support aggregate demand in the economy, going forward, according to the RBI Bulletin's 'State of the Economy' report. "Amid rising trade uncertainties and geo-economic fragmentation, building more resilient trade partnerships presents a strategic opportunity for India to deepen its integration with global value chains. In addition, measures to accelerate domestic investment in infrastructure and structural reforms aimed at improving competitiveness and productivity would build resilience while supporting the growth momentum," the central bank's document emphasised. Earlier in the day, a Morgan Stanley report said it expects India's economy to be the third-largest globally by 2028 and more than double in size to $10.6 trillion by 2035. The Asian Development Bank (ADB) said that India's GDP growth is projected to grow at 6.5 per cent in 2025, and a robust 6.7 per cent in 2026, amid strong domestic demand, a normal monsoon and monetary easing in the country. When it comes to inflation, the country is likely to clock 3.8 per cent inflation this year, followed by 4.0 per cent in 2026 -- well within the RBI projections, the ADB added. According to the RBI Bulletin, as intense negotiations are underway for closing trade deals before the new import tariff rates kick in from August 1, 2025, the focus is back on US trade policies and their spillover effects globally. "Financial markets, however, seem to have taken trade policy uncertainties in their stride, possibly reflecting optimism on reaching trade deals that are less disruptive to the global economy," said the Reserve Bank, adding that even so, "underpricing of macroeconomic risk by financial markets remains a concern". "The evolving pattern of global trade flows and supply chains are far from settled. These uncertainties pose considerable headwinds to global economic prospects," it noted.
Mint
10 hours ago
- Business
- Mint
Tariff risk drives another round of Asia forecast downgrades
SINGAPORE—A fresh wave of growth forecasts for Asia highlights the threat posed by tariffs to the region, even as trade deals gather pace. The Asian Development Bank and multilateral organization Asean+3 Macroeconomic Research Office, or Amro, both lowered growth projections for major Asian economies, citing the impact of U.S. trade policy. Asia-Pacific has weathered a tough external environment this year, 'but the economic outlook has weakened amid intensifying risks and global uncertainty," said ADB chief economist Albert Park. Strong domestic demand and export front-loading supported regional economies in the first half of the year, but that momentum is expected to weaken, the Philippines-based multilateral bank said in a report Wednesday. The ADB now projects gross domestic product growth for developing Asia at 4.7%, down from April's forecast of 4.9% and the 5.1% expansion recorded in 2024. Next year, growth in developing Asia, which comprises 46 ADB members including China, South Korea and India, is forecast to slow further to 4.6%. Southeast Asia will be hit hardest by worsening trade conditions and persistent uncertainty, the ADB warned. Although several Southeast Asian nations have negotiated for lower tariffs, analysts say that won't offset the blow of high trade barriers, economic fragmentation and policy shocks. Growth in Vietnam, the first to get a deal, is still expected to slow through 2025 and 2026 as U.S. tariffs dampen export demand. The ADB cut Vietnam's GDP growth projections to 6.3% in 2025 and 6.0% in 2026, from 6.6% and 6.5%, respectively. Those who have yet to reach a compromise, such as South Korea or Taiwan, face significant 'reciprocal" tariffs on U.S.-bound exports if no agreement is reached by Aug. 1. The temporary trade truce between the U.S. and China is also set to expire in August. 'A renewed imposition of the U.S. reciprocal tariffs or a re-escalation in US-PRC [People's Republic of China] trade tensions could reduce regional growth by 0.5 to 1.4 percentage points," the ADB said. A faster deterioration in China's property market also poses a risk to regional growth, it added. China's latest batch of property data showed the sector has yet to recover, with housing prices and investment still subdued as officials struggle to revive demand. Beijing's other stimulus efforts, including for consumption, helped the economy grow in the first half of the year, but the outlook for the rest of 2025 remains challenging, the ADB said. For now, it maintains its growth forecasts for China at 4.7% this year and 4.3% in 2026. Beijing has a target of 5% for this year. Tariff pressures also led ADB to trim growth views for India to 6.5% and 6.7% in 2025 and 2026, respectively. South Korea's forecast was lowered to 0.8% this year and 1.6% the next year. Amro echoed concerns about a continued lack of clarity on Trump trade policy. 'Tariffs will likely reduce U.S. demand, increase investment uncertainty and dampen consumer confidence," the multilateral organization said. The resulting global slowdown will further impact ASEAN+3, which includes the 10 Association of Southeast Asian Nations members, plus China, Japan, and South Korea. Amro expects regional growth to slow to 3.8% this year and 3.6% next year. Under a scenario where U.S. tariffs on China revert to April 2 levels, BRICS-aligned economies face an additional 10% duty, and previously exempt goods incur a 25% levy, growth could drop below 3% next year, Amro estimates. Non-tariff protectionist measures, such as stricter investment regulations, could magnify the impact, it added.
