India is on track to achieve projected 5.5 per cent economic growth rate in 2014-15 as declining oil prices present a golden opportunity for many beneficial reforms, the Asian Development Bank said on Wednesday.
“India is on track to reach the growth forecast of 5.5 per cent in financial year ending March 31, 2015 after expanding by 5.7 per cent in the first quarter and 5.3 per cent in the second quarter,” the Manila-based agency said.
Falling global oil prices presents a golden opportunity for importers such as Indonesia and India to reform their costly fuel subsidy programmes, ADB Chief Economist Shang-Jin Wei said.
The ADB said the Indian government had demonstrated willingness to tackle contentious reforms by eliminating diesel subsidies, but it must extend its efforts to reach the forecast of 6.3 per cent GDP growth in 2014-15.
Slightly trims Asia forecast The ADB slightly trimmed its growth forecast for developing Asia for this year and next, but said sliding prices for oil should help economies in the region push through with growth reforms. In its update to the 2014 outlook, the ADB said on Wednesday developing Asia was now expected to grow 6.1 percent this year, a tad below its 6.2 per cent forecast in September. Growth in 2015 was seen at 6.2 per cent, from 6.4 per cent previously.
The ADB cut its 2014 and 2015 growth forecasts for China to 7.4 per cent and 7.2 per cent, respectively, from the 7.5 per cent and 7.4 per cent estimates made in September, due to falling property prices and the spill-over effects on the construction sector.
Southeast Asia is expected to grow slower than previously thought in 2014 and 2015 due to a slackening in economies in the region. The region is seen growing at 4.4 per cent in 2014, down from a previous estimate of 4.6 per cent, and 5.1 per cent in 2015 instead of 5.3 per cent. Inflation in the region in 2014 is now forecast to be lower at 3.2 percent in 2014 and 3.5 percent in 2015—
