ADB lowers India economic growth forecast for current fiscal to 10%
Activities at a wholesale market in Indian capital New Delhi in September 2020. (Photo by SAJJAD HUSSAIN/AFP via Getty Images)
THE Asian Development Bank (ADB) on Tuesday (20) downgraded India’s economic growth forecast for the current financial year to 10 per cent from 11 per cent projected in April on account of the negative impact of the coronavirus pandemic.
The country’s gross domestic product (GDP) recovered to 1.6 per cent in the last quarter of the fiscal that ended March 2021, reducing contraction in the whole fiscal from eight per cent estimated in April to 7.3 per cent, the funding agency said in the Asian Development Outlook (ADO) Supplement.
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“Then a second wave of the pandemic induced many state governments to impose strict containment measures. New COVID-19 cases daily peaked at more than 4,00,000 in early May, then fell to a little over 40,000 in early July,” it said.
“Early indicators show economic activity resuming quickly after containment measures eased. The growth projection for FY2021 (ending March 2022), downgraded from 11 per cent in ADO 2021 to 10 per cent, reflects large base effects,” the statement added.
The projection for FY2022 (ending in March 2023), by which time much of India’s population is expected to be vaccinated, is upgraded from 7 per cent to 7.5 per cent as economic activity normalises, the ADB said.
The ADB supplement also spoke about China, saying the expansion in the Asian economy is still projected at 8.1 per cent in 2021 and 5.5 per cent in 2022 as favourable domestic and external trends align with the forecasts made in April.
On South Asia, the ADB said the sub-region’s economic outlook has been dampened by new waves of the pandemic hitting it between March and June 2021. It said the adverse economic impact of the waves is expected to be limited with businesses and consumers in a better place to adapt to the pandemic and containment measures now than they were a year earlier.
“The GDP growth forecast for the sub-region in 2021 is downgraded from 9.5 per cent in ADO 2021 to 8.9 per cent but upgraded for 2022, from 6.6 per cent to 7 per cent,” the agency said in the supplement.