New Delhi: India is likely to maintain its position as the fastest-growing major economy with the ADB outlook projecting a growth rate of 7.5 per cent for 2022-23 on strong investment prospects against 5 per cent for China in January-December 2022.
The Asian Development Bank Outlook 2022 said that India's growth in the next fiscal year 2023-24 will accelerate further to 8 per cent, though China will witness a deceleration in growth to 4.8 per cent in 2023.
The ADB, however, flagged inflation as a major issue mainly on account of a rise in prices of commodities in wake of the ongoing Russia Ukraine war.
In its India Chapter, ADB said: "GDP is forecast to grow by 7.5 per cent in FY2022 (fiscal to be ending in March 2023) and 8 per cent in FY2023 (to be ending in March 2024), driven by strong investment growth, with public investment helping crowd-in private
investment.
FY2022 refers to the 12 months ending 31 March 2023, ADB said about the India chapter.
The Indian economy expanded by 8.9 per cent in the fiscal ended March 2021. China posted a growth rate of 8.1 per cent in 2021.
"Economies in developing Asia are starting to find their footing as they slowly emerge from the worst of the COVID-19 pandemic," ADB Chief Economist Albert Park said.
"However, geopolitical uncertainty and new COVID-19 outbreaks and virus variants could derail this momentum. Governments in the region will need to remain vigilant and prepared to take steps to counter these risks. That includes making sure as many people as possible are fully vaccinated against COVID-19. Monetary authorities should also continue to monitor their inflation situation closely and not fall behind the curve," Albert Park said.
In the report, the Manila-based multilateral funding agency said the growth in South Asia is projected to slow to 7 per cent in 2022, before picking up to 7.4 per cent in 2023.
The subregion's growth dynamics are largely driven by India and Pakistan, it added.
Pakistan's growth is forecast to moderate to 4 per cent in 2022 on weaker domestic demand from monetary tightening and fiscal consolidation before picking up to 4.5 per cent in 2023, it said.
Developing Asia's economies are predicted to grow by 5.2 per cent this year and 5.3 per cent in 2023, thanks to a robust recovery in domestic demand and continued expansion in exports, ADB said.
Developing Asia comprises 46 member countries of ADB by geographic group: the Caucasus and Central Asia, East Asia, South Asia, Southeast Asia and the Pacific.
ADB said the Russian invasion of Ukraine poses the most severe risk to developing Asia's economic outlook.
However, uncertainties stemming from the Russian invasion of Ukraine, the continuing coronavirus disease (COVID-19) pandemic, and monetary tightening by the US Federal Reserve pose risks to the outlook.