Archive · 11 Dec 2025
ADB Raises India's FY26 Growth Forecast
The Asian Development Bank (ADB) has increased its prediction for India's economic growth in the fiscal year 2026 to 7.2%, up from the previous estimate of 6.5%.
This change comes after India had a stronger economic performance in the third quarter than expected, thanks to tax relief measures that helped people spend more.
The ADB also raised its growth forecasts for the broader Asia and Pacific region, citing better export demand, reduced trade uncertainty, and improved financial conditions.
The region's growth is now expected to be 5.1% for this year and 4.6% for next year.
The ADB noted that strong exports, especially in high-tech goods, along with lower inflation and stable markets, are contributing to these positive outlook.
However, the forecast for the following year, FY26-27, remains unchanged at 6.5%, indicating a potential slowdown.
The Reserve Bank of India has also cut the repo rate and raised its GDP growth forecast to 7.3%, while lowering inflation expectations to 2%.
ADB upgraded India's FY26 growth forecast to 7.2% from 6.5% due to stronger Q3 performance and tax relief measures.
FY26-27 growth forecast remains unchanged at 6.5%, indicating a potential slowdown.
ADB also raised growth expectations for developing Asia and the Pacific to 5.1% for 2025 and 4.6% for 2026.
India's GDP grew 8.2% in Q3, driven by strong domestic consumption, factory output, and a robust services sector.
Resilient exports, cooling inflation, stable markets, and robust domestic consumption are key drivers of the improved outlook.
- Who
- Asian Development Bank (ADB)
- What
- Raised India's economic growth forecast for FY26 to 7.2%
- When
- After strong Q3 performance and improving fiscal conditions
- Where
- India, Developing Asia and Pacific
- Why
- Due to stronger-than-expected Q3 performance, tax cuts, and robust domestic consumption
Optimistic View
Cautious View
Growth Forecast
Optimistic View
The ADB and Fitch have raised India's FY26 growth forecast to 7.2% and 7.4% respectively, citing strong economic performance and robust domestic demand.
Cautious View
The forecast for FY26-27 remains unchanged at 6.5%, indicating a potential slowdown in the following year.
Economic Performance
Optimistic View
India's GDP grew 8.2% in Q3, driven by strong domestic consumption, factory output, and a robust services sector.
Cautious View
Weaker agricultural growth could pose a risk to sustained economic momentum.
Policy Support
Optimistic View
Recent tax cuts, public investment, and deregulation have boosted domestic demand and economic resilience.
Cautious View
The long-term impact of these measures and their sustainability remains to be seen.
- Organization
- Asian Development Bank (ADB)
- Current FY26 Growth Forecast
- 7.2%
- Previous FY26 Growth Forecast
- 6.5%
- FY26-27 Growth Forecast
- 6.5%
- Q3 GDP Growth
- 8.2%
- Developing Asia and Pacific Growth Forecast (2025)
- 5.1%
- Developing Asia and Pacific Growth Forecast (2026)
- 4.6%
- Key Drivers
- Resilient exports, cooling inflation, stable markets, robust domestic consumption
Sources
ADB Lifts India’s FY26 Growth Outlook to 7.2% After Strong Q3 Momentum
ADB Raises India’s FY26 GDP Forecast to 7.2 pc
ADB raises India growth forecast sharply to 7.2% for FY26
ADB sharply revises India’s GDP growth upward to 7.2% for FY26
