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ASIAN DEVELOPMENT BANK (ADB) GROWTH FORECAST

  1. ASIAN DEVELOPMENT BANK (ADB) GROWTH FORECAST

Context

The Asian Development Bank (ADB) has revised India’s economic growth forecast for the financial year 2025–26, reducing it slightly due to global trade tensions. The revision comes against the backdrop of tariffs imposed on India by the United States, which are expected to affect exports and growth momentum.

 

ADB’s Growth Forecast for India

  • Forecast Update: The ADB lowered India’s GDP growth projection for FY 2025–26.
     
  • Reason: The primary factor behind this revision is the impact of US tariffs on Indian goods, which may dampen trade flows and investment sentiment.
     
  • Revised Growth Rate: The earlier estimate of 6.7% growth has been cut to 6.5%.
     
  • Implications: While India continues to remain among the fastest-growing major economies, the revised forecast highlights vulnerabilities linked to external trade pressures.
     

 

 

About the Asian Development Bank (ADB)

  • Establishment: Founded in 1966.
     
  • Headquarters: Manila, Philippines.
     
  • Purpose: To foster development and poverty reduction across Asia and the Pacific.
     
  • Membership: Total 69 members, out of which:
     
    • 49 members are from the Asia-Pacific region.
       
    • 20 members belong to other regions, showing that ADB is not restricted to Asian nations alone.
       
  • Functions:
     
    • Provides loans, grants, equity investments, and technical assistance.
       
    • Supports long-term infrastructure and social development projects.
       
  • Focus Areas: Infrastructure, health, education, water supply and sanitation, climate change, and sustainable development initiatives.
     

 

 

Related Development Banks

  • Asian Infrastructure Investment Bank (AIIB): Headquartered in Beijing, China, focusing on infrastructure investment.
     
  • African Development Bank (AfDB): Headquartered in Abidjan, Côte d'Ivoire, a country known globally for being a major cocoa producer.
     

Conclusion

The Asian Development Bank’s revised forecast for India highlights how international trade tensions, especially United States tariffs, influence domestic growth. Though trimmed from 6.7% to 6.5%, India’s outlook remains robust, necessitating stronger demand, diversified exports, and competitive resilience.

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