New Delhi: Asian Development Bank has trimmed India's growth forecast for current year to 7 percent, from 7.4 percent previously. The Manila-based lender has projected slower growth rate of 7.4 percent for the next year.


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"India's GDP growth is downgraded to 7 per cent in financial year 2017-18, a 0.4 percentage point drop from the April forecast. In financial year 2018-19, the forecast is adjusted down to 7.4 per cent, from 7.6 per cent," ADB said in its Asian Development Outlook 2017 update.


However, the multilateral lender said India continues its strong showing although demonetisation and implementation of the new goods and services tax regime have dented consumer spending and business investment.


Developing Asia is expected to grow by 5.9 and 5.8 percent in 2017 and 2018, respectively, the Manila-based lender said.


That is unchanged from its July estimates, but higher than the 5.7 percent forecast it gave for both years in its Asian Development Outlook (ADO) released in April. 


China is expected to grow 6.7 percent this year and 6.4 percent next year, the ADB said, unchanged from its July estimates.


"Growth prospects for developing Asia are looking up, bolstered by a revival in world trade and strong momentum in PRC(China)," ADB Chief Economist Yasuyuki Sawada in a statement after the bank updated its 2017 outlook.


Sawada said developing Asia should take advantage of favourable short-term economic prospects to invest in infrastructure, improve productivity and maintain sound economic policies to lift long-term growth.


However, the ADB trimmed its growth forecast for South Asia to 6.7 percent this year and 7.0 percent next year, compared with estimates of 7.0 percent and 7.2 percent made in July.


Southeast Asia’s economy will grow 5.0 percent this year and 5.1 percent next year, stronger than July forecasts of 4.8 percent and 5.0 percent.


Inflation in the region was forecast to be slightly slower at 2.4 percent this year and 2.9 percent next year, compared with the 2.6 percent and 3.0 percent estimated in July.  


With Agency Inputs