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New Delhi, Mar 27: Growth of the Indian economy is expected to slow to 8% in 2007-08, from 9.2% in the current fiscal, according to the Asian Development Bank Outlook 2007.
“A soft landing is a likely outcome,” said ADB chief economist Ifzal Ali, adding that India’s GDP would again pick up speed in 2008-09 and grow at 8.3%.
China is projected to clock a double-digit growth rate of 10% in 2007 and marginally slow to 9.8% in the next fiscal. Overall, Asian economies are expected to expand at 7.6% in 2007 and 7.7% in 2008. In 2006, they grew at 8.3%, the fastest in more than a decade.
The ADB outlook projects the wholesale price index also to moderate to 5% and then remain steady over the next two years. This is expected on the back of a tighter monetary policy, a rise in agricultural planting, an expected good spring harvest and cuts in import duties on key commodities, it said.
The robust growth will help the Centre cut its fiscal deficit to 3.3% of GDP next fiscal from 3.7% in 2006-07.
A key, long-term structural challenge in India was sluggish farm performance, the bank’s outlook pointed out. Besides fuelling inflation as a result of rising food prices, shortcomings in the sector are a key driver of poverty and underemployment, it added.
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