ADB lowers India’s economic growth forecast for this fiscal year to 10%

The Asian Development Bank revised India’s economic growth forecast for the current budget from 11 percent to 10 percent on Wednesday, citing the negative effects of the second wave of the pandemic. India’s growth forecast for fiscal year 2021 (ending March 2022) has been revised downwards as the surge in COVID-19 cases in May hampered recovery, the Asian Development Bank (ADB) said in its latest economic outlook.

“However, the outbreak cleared faster than expected, causing several states to relax lockdown measures and return to more normal travel patterns.

“The economy is expected to recover strongly in the remaining three quarters of FY 2021 and grow by 10 percent over the entire fiscal year before weakening to 7.5 percent in FY2022,” says the Asian Development Outlook Update (ADOU ) 2021.

In its forecast for the Asian development outlook from April this year, the multilateral funding agency for India had forecast growth of 11 percent in the current financial year.

“As consumption will only recover gradually, government spending and exports will contribute more to growth in FY2021 than in the previous fiscal year,” said India.

Regarding the region, they say the outlook is different in South Asia. South Asia includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.

The sub-region is expected to grow more slowly this year than previously forecast, but faster next year, it said.

According to the ADB, growth in the People’s Republic of China (PRC) will remain strong despite a sustained recovery in private consumption.

“The forecast for GDP growth remains unchanged at 8.1 percent in 2021 and 5.5 percent in 2022 as solid export performance and higher fiscal support in the second half of 2021 keep growth on track,” it said to China.