The Asian Development Bank (ADB) on Wednesday reaffirmed India’s growth outlook for the current fiscal year at 7 per cent, citing improved agricultural output and increased government spending.

In its Asian Development Outlook update, the ADB said exports would be higher than previously projected, driven by stronger services exports. However, merchandise export growth is expected to remain muted in the next fiscal.

“GDP growth is projected at 7 per cent in FY2024 and 7.2 per cent in FY2025,” ADB said, adding that India’s growth prospects remain robust.

S&P Global Ratings on Tuesday maintained its forecast for India’s economic growth at 6.8 per cent for the current fiscal year ending March 2025. It also retained its GDP growth forecast for 2025-26 at 6.9 per cent.

While GDP growth slowed to 6.7 per cent in the first quarter of FY2024, the ADB expects it to accelerate in the coming quarters due to improved agriculture and a strong outlook for industry and services.

Private consumption is anticipated to rise, driven by stronger rural consumption and already robust urban consumption. The outlook for private investment is positive, although growth in public capital expenditure is expected to moderate in FY2025.

The ADB said efforts toward fiscal consolidation are expected to reduce the fiscal deficit to a level last seen before the Covid-19 pandemic, reflecting robust revenue collection and restrained current expenditure.