The Asian Development Bank (ADB) in its latest economic update has pegged India’s GDP growth rate at 7 per cent, lower than the 7.5 per cent projection made in April. China, according to ADB projections will register a 3.3 per cent growth. In April, it had estimated a growth rate of 5 per cent for China. 

“While India’s gross domestic product (GDP) is steadily closing in on its pre-pandemic trend level, economic growth in the near term is likely to be affected by the global slowdown and high inflation,” ADB Country Director for India Takeo Konishi said.

“We expect that the government’s continued efforts to improve the regulatory climate for businesses and infrastructure will boost investment and create more jobs in the medium term,” he added.

The ADB said that the services sector is expected to remain buoyant due to the lifting of Covid-19 restrictions though the manufacturing industry could grow slower because of rising input costs. Agriculture value-added is also likely to be marginally lower, as the sown area has declined, and the monsoon remains uneven, it said, adding that a slowdown in global growth will result in sluggish exports, while the value of imports is likely to increase.

The Reserve Bank of India has estimated India’s GDP growth at 7.2 per cent. However, analysts opined that there may be a downward revision.

Speaking at the Global Fintech Fest event in Mumbai, Chief Economic Advisor V. Anantha Nageswaran too said that the Indian economy is expected grow at over 7 per cent compared to the earlier forecast of 8 per cent of growth rate projected in January.

“India’s own growth rates have come off the projections made in January down to about 7-plus percent for the current financial year,” Nageswaran said.

Meanwhile, China’s Foreign Ministry Spokesperson Wang Wenbin at the regular press conference said that globalization has encountered headwinds in the last few years with a rise in unilateralism and protectionism. “The world economy is in the doldrums. Despite difficulties and challenges, China still believes that openness and cooperation is the way forward and win-win cooperation has the support of the people,” he said.

He however said that China would remain committed to wider, broader and deeper opening-up.

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