The ADB has downgraded India’s economic growth forecast for the current financial year to 10% from 11% projected earlier this year, mainly on account of the adverse impact of the coronavirus pandemic.
India’s GDP growth recovered to 1.6 per cent in the last quarter of fiscal year ended March 2021, narrowing contraction in the whole fiscal year from 8 per cent estimated in April to a revised 7.3 per cent, the multilateral funding agency said in the Asian Development Outlook (ADO) Supplement.
Meanwhile, the inflation forecast for Asia and the Pacific this year has been raised to 2.4 per cent, from 2.3 per cent in April, reflecting rising oil and commodity prices. The projection for 2022 remains at 2.7 per cent, it added.
For South Asia, the inflation forecast has been raised for 2021 to 5.8 per cent from 5.5 per cent, mainly reflecting a higher forecast for India. However, it has been kept unchanged at 5.1 per cent for 2022.
Indian consumer price inflation rose to 6.3 per cent year-on-year in May as both food and fuel inflation outpaced expectations. Meanwhile, growth 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.
With regard to China, the ADB supplement said the expansion in the People’s Republic of China is still projected at 8.1 per cent in 2021, and 5.5 per cent in 2022, as favorable domestic and external trends align with April forecasts.
On South Asia, ADB said the economic outlook for the subregion is dampened by new waves of COVID-19 hitting the subregion from March to June 2021.
“The GDP growth forecast for the subregion 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,” ADB said in the supplement.
The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966, which is headquartered in Metro Manila, Philippines. The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly the Economic Commission for Asia and the Far East or ECAFE) and non-regional developed countries. From 31 members at its establishment, ADB now has 68 members. As of 31 December 2020, Japan and the United States each hold the largest proportion of shares at 15.571%. China holds 6.429%, India holds 6.317%, and Australia holds 5.773%.
