ADB reduces India’s GDP growth estimate, now estimates to be 6.5%, know what is the reason for economic lethargy?
Asian Development Bank (ADB) Between trade uncertainty and US concerns about high fees, India’s growth estimate for FY 2025-26 was reduced from 6.7 percent to 6.5 percent on Wednesday. India remains one of the fastest growing major economies in the world, despite a decline in the July Asian Development Sky Scheme (ADO) compared to April 2025. According to the July Asian development scenario of July, the amendment has been mainly made due to the impact of the US fee and its policy uncertainty. In addition to the effects of low global growth and the direct impact of additional US fees on Indian exports, increased policy uncertainty can affect investment flow.
Economic activities remain strong
It said that despite this, economic activities remain strong and the improvement in rural demand is expected to increase domestic consumption strongly. Service and agriculture sector growth is expected to be the major driver and the forecast of more monsoon rainfall than normal will give support to the agricultural sector. The report estimates the growth rate of 6.7 percent for FY 2026-27. The initial expectations of softening of crude oil prices can also support economic activities in FY 2025-26 and FY 2026-27. The Economic Review has estimated the growth rate of GDP (GDP) to be between 6.3 percent and 6.8 percent for FY 2025-26, while the Reserve Bank of India (RBI) has reduced its growth estimate for the current financial year from 6.7 percent to 6.5 percent.
S&P had increased GDP growth estimate
Given the normal monsoon, low prices of crude oil and monetary softening, S&P global ratings increased India’s GDP in the current financial year 2025-26 to 6.5 percent. Earlier, S&P had reduced India’s growth estimate of 2025-26 to 6.3 percent, citing global uncertainties and American fees shaking. The rating agency S&P also expressed concern over the rising risk for the global economy due to unrest in West Asia and said that long-term rise in oil prices could have a significant economic impact in the Asia-Pacific region through slow global growth and pressure on the current accounts, prices and costs of pure energy importers.
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