The Asian Development Bank (ADB) has slashed India’s economic growth forecast for the current financial year to 10 percent, from the April projection of 11 percent. Due to the negative impact of the pandemic, the Manila-based bank lowered the projection.
The report was published in the Bank’s economic publication, Asian Development Outlook (ADO) on Tuesday. It said that the contraction was narrowed at an estimated 7.3 percent from 8 percent in April after the GDP recovered to 1.6 percent in the last quarter of the previous fiscal year.
“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.”
“Early indicators show economic activity resuming quickly after containment measures eased. The growth projection for FY2021 (ending March 2022), downgraded from 11 percent in ADO 2021 to 10 percent, reflects large base effects,” the supplement said.
Developing Asia’s growth has also been revised by the ADB, which includes India and China, from 7.3 percent projected in the April report to 7.2 percent now.
“Asia and the Pacific’s recovery from the COVID-19 pandemic continues, although the path remains precarious amid renewed outbreaks, new virus variants, and an uneven vaccine rollout,” said the ADB Chief Economist, Yasuyuki Sawada.
For most of the Southeast Asian countries, the multilateral funding agency continued the 2022 growth forecasts, 5.0% for Indonesia, 5.7% for Malaysia, 5.5% for the Philippines, 4.1% for Singapore, and 7.0% for Vietnam.
“On top of containment and vaccination measures, phased and strategic rejuvenation of economic activities – for instance, trade, manufacturing, and tourism – will be key to ensure that the recovery is green, inclusive, and resilient,” Sawada said.
In a statement made by the Chief Economic Advisor of India, K V Subramanian on Monday, he said that the economic growth during the current fiscal year is projected to be 11 percent, by the latest Economic Survey.
“We will grow at a high growth rate this year. This year’s growth will be from the lower base but we anticipate 6.5-7 percent growth next year FY’23 and from thereon, growth accelerating even further,” he said.
Released in January this year, the Economic Survey of 2020-2021 projected an 11 percent GDP growth for the financial year ending in March 2022.