ADB raises India's growth forecast sharply to 7.2% for FY26
- IBEF
- December 11, 2025
The Asian Development Bank (ADB) recently revised its GDP growth outlook for India to 7.2% for FY26, up by 0.7 percentage points from the previous forecast. This revision was driven by India’s robust performance during the quarter of July-September, when GDP growth of 8.2% was recorded, the highest in the last six quarters. The increase was primarily driven by consumption related to festivals, strong industrial production, and continued vigorous service sector activity, which helped offset an overall decline in agricultural production. The ADB’s Asian Development Outlook (ADO) December 2025 report noted that India was a significant contributor to the economic growth outlook for developing Asia and the Pacific in 2025, which was upgraded to 5.1% from an earlier estimate of 4.8%. In addition, the growth forecast for China was increased to 4.8% due to sustained export levels and increased fiscal policies.
In line with rising expectations for India’s economy, the Reserve Bank of India (RBI) has lowered the repo rate by 25 basis points and raised its FY26 GDP forecast to 7.3%. In addition, the Global Ratings Agency Fitch has raised India’s FY26 outlook from 6.9% to 7.4% due to continued improvement in economic activity and strong domestic demand. Consumption in India remains strong, and the federal and state governments are working together on major reform initiatives that will further boost consumption. Therefore, India is now the most significant contributor to Asia's expected growth in 2025.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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