Thu. Mar 28th, 2024
picture credits- BW business world

In another economic growth projection revision, the Asian Development Bank has downgraded India’s economic growth forecast. The economic growth forecast has been downgraded for the current financial year to 10 per cent. It has been revised from 11 per cent projected earlier in the month of April. It is to be noted that the economic forecast has been revised on the account of the adverse impact of the coronavirus pandemic on the Indian economy. The revision was done by the multilateral funding agency in the Asian Development Outlook (ADO) Supplement.

In the last fiscal that ended March 2021, India’s GDP growth had recovered to 1.6 per cent. This had effectively narrowed contraction in the whole fiscal year from 8 per cent estimated earlier in the month of April to a revised 7.3 per cent.

It stated that “Then a second wave of the pandemic induced many state governments to impose strict containment measures.” This was due to rising covid cases in the economy, that had increased so much so that new COVID-19 cases daily peaked at more than 4,00,000 in early May.

The agency stated that “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,”.

On the other hand, the projection for the fiscal year 2022 , by which time much of India’s population is positively expected to be vaccinated, has been upgraded from 7 per cent to 7.5 per cent. This has been done on the assumption that the economic activity will normalize.

With regard to China, the Asian Development Bank maintained that the expansion in the People’s Republic of China is projected at 8.1 per cent in 2021. Additionally, growth for fiscal year 2022 has been placed at 5.5 per cent. The projections have been made keeping in mind favorable domestic and external trends.

Regarding South Asia, the Asian development bank has maintained that the economic outlook for the subregion has been dampened by new waves of COVID-19 hitting the subregion during the period of March to June 2021.

ADB Lowers India's Economic Growth Forecast For Current Fiscal Year From 11% To 10%,

picture credits- Swarajya

It stated that “The adverse economic impact of these new waves is expected to be limited, with businesses and consumers better able to adapt to the pandemic and containment measures now than they were a year ago”.

Additionally ADB in supplement stated that “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,”.

Though recovery is under way in developing Asia but still the growth projection for this year has been revised down slightly from 7.3 per cent in April, to 7.2 per cent. This has been done following renewed virus outbreaks in some economies.

The projection for developing Asia for the fiscal year 2022 has been upgraded from 5.3 per cent to 5.4 per cent, it added.

By Shivani Khanna

A woman who believes in equal rights and aspires to inspire people through her writings. I aspire to contribute to the economic world and society with diligence and thus being an economic advisor tops my career ambitions . I currently am pursuing Economic honours ( at undergrad level) from delhi university.

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