ASIAN DEVELOPMENT OUTLOOK 2019
GS 3: Economy
Why in News?
Asian Development Bank has published Asian Development Outlook 2019.
- ADB has cut India’s growth forecast to 7.2% for 2019-20 because of a slower-than-expected pickup in investment demand.
- The growth rate in Financial Year 2020-21 is likely to be 7.3%.
- India will remain the fastest growing major economy, as China is projected to grow at 6.3% in 2019. India’s strong growth is because of strong household spending and corporate fundamentals. Strong household spending– Income support to farmers, hikes in procurement prices for food grains, and tax relief to taxpayers earning less than Rs 5 lakh, declining fuel and food prices. Strong corporate fundamentals– An increase in utilization of production capacity by firms, falling levels of stressed assets held by banks and easing of credit restrictions on certain banks, is expected to help investment grow at a healthy rate. Imports are expected to rise mainly due to stronger domestic demand, while a growth slowdown in India’s key export destinations would dent export growth.
- The current account deficit is expected to widen a bit to 2.4% of GDP in FY2019 and 2.5% of GDP in FY2020. The inflation is expected to average around 4% in the first half of FY2019, and therefore the Reserve Bank would have some room for lowering policy rates further increasing credit.
- The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966. ADB is headquartered in Manila, Philippines.
- It aims to promote social and economic development in Asia. ADB now has 67 members, of which 48 are from within Asia and the Pacific and 19 outside. Japan holds the largest proportion of shares in ADB followed by the USA.