New Delhi, Sep 20 (IANS): The Asian Development Bank (ADB) on Wednesday lowered its growth forecast for India’s economy to 6.3 per cent for 2023-24 from 6.4 per cent estimated earlier, citing the adverse impact of slowing exports and erratic rainfall that could hit farm output. 

However, ADB has retained its GDP growth projection for 2024-25 at 6.7 per cent on the back of higher private investment and industrial production.

The report also points out that the Indian economy recorded a robust growth of 7.8 per cent in the first quarter of the current financial year despite global uncertainties. It expects growth to be propelled by “robust domestic consumption as consumer confidence improves, and by investment including large increases” in government capital expenditure through the rest of this year and next year.

“Monsoon rainfall under the influence of a developing El Nino has led to erratic weather patterns, including flooding in certain regions and deficient rains, particularly in August. The erratic rainfall patterns have resulted in damage to the rice crop in particular and lower sowing for pulses in the kharif season,” the report said.

It has cut its projection for farm sector growth by close to one percentage point.

ADB has also raised its inflation projection for India for 2023-24 to 5.5 per cent, up from the previous 5 per cent.

"Food inflation picked up in July due to adverse weather conditions, contributing to a rise in South Asia's overall inflation rate. If India's agricultural output weakens and the rice export ban remains in place, this could escalate food price inflation in developing Asia," the report stated.