ADB slashes India’s FY22 growth forecast to 10%

New Delhi, July 20

Asian Development Bank (ADB) has downgraded India’s economic growth forecast for the current financial year to 10% on Tuesday, 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% in the last quarter of fiscal year ended March 2021, narrowing contraction in the whole fiscal year from 8% estimated in April to a revised 7.3%, the multilateral funding agency said in the Asian Development Outlook (ADO) Supplement.

“Early indicators show economic activity resuming quickly after containment measures eased. The growth projection for FY2021 (ending March 2022), downgraded from 11% in ADO 2021 to 10%, reflects large base effects,” it said. Indian consumer price inflation rose to 6.3% year-on-year in May as both food and fuel inflation outpaced expectations. "This Supplement raises the inflation forecast for India in FY2021 (fiscal ending March 2022) by 0.3 percentage points to 5.5%,” the ADB said. — PTI

Asian Development Outlook Supplement

• India's GDP growth recovered to 1.6% in the last quarter of fiscal year ended March 2021, narrowing contraction in the whole fiscal year from 8% estimated in April to a revised 7.3%
• For South Asia, the inflation forecast has been raised for 2021 to 5.8% from 5.5%, mainly reflecting a higher forecast for India. However, it has been kept unchanged at 5.1% for 2022