The Asian Development Bank (ADB) has lowered India’s growth projections for the current financial year by a percentage point to 10 per cent, mainly due to disruptions in economic activity caused by the second wave of the Covid-19 pandemic.
In April, ADB had projected a growth rate of 11 per cent in 2021-22 for India.
In its update of the Asian Development Outlook (ADO) released on Wednesday, the multilateral lending agency has also trimmed the growth forecast for Asia as a region from 7.3 per cent to 7.1 per cent for 2021, though it retained the growth projections for China at 8.1 per cent. “The growth forecast for India in fiscal year 2021 (ending March 2022) is revised down, as May’s spike in Covid-19 dented the recovery. The outbreak, however, dissipated faster than anticipated, resulting in several states easing lockdown measures and returning to more normal travel patterns,” said the ADO Update (ADOU) 2021.
The economy is expected to rebound strongly in the remaining three quarters of FY2021, and grow by 10 per cent in the full fiscal year, before moderating to 7.5 per cent in FY2022 (fiscal ending March 2023), ADB said.
The Reserve Bank of India (RBI) also trimmed India’s economic growth projection by a similar margin to 9.5 per cent in June this year.
The forecast, for the 12 months ending March 31, 2022, takes into account disruptions in economic activity caused by the second wave of coronavirus disease (Covid-19) pandemic, which adversely impacted services, domestic consumption, and the urban informal sector, ADB said.