ADB forecasts 5% growth of Indian economy in FY09

In its recent report, Asian Development Bank (ADB) has said that India’s economic growth would slip to 5% in 2009, down from 7.1% in 2008, but it should speed up next year as the global economy recovers and lower local interest rates spur private investment and manufacturing,

The report named, Asian Development Outlook 2009 (ADO 2009), adds that fiscal stimulus measures that the government announced between December 2008 and February 2009 should allow India’s growth to rise to 6.5% in FY10.

But there are serious risks and challenges ahead. Prolonged recession in the major industrial economies beyond the second quarter of fiscal 2010 could hamper India’s recovery.