Asian Development Bank cuts India’s GDP growth forecast to 10 percent for FY21

The Asian Development Bank Wednesday cut India’s gross domestic product (GDP) growth forecast to 10% for FY21, from 11% projected in April, on account of disruptions due to the second wave.Growth projection for FY22 has been revised upwards to 7.5% from 7% forecast earlier.

"The forecast, for the 12 months ending 31 March 2022, takes into account disruptions in economic activity caused by the second coronavirus disease (COVID-19) pandemic wave, which adversely impacted services, domestic consumption, and the urban informal sector," the multilateral lender said in a statement.

The forecast for FY22 assumes a relatively limited economic impact from the pandemic going forward thanks to an accelerated vaccination campaign and better preparedness among businesses, households, and the health care sector.

The Indian economy is showing encouraging signs of recovery as the effects of the second wave dissipate,” said ADB Country Director for India Takeo Konishi.

“The government’s vaccination drive, its new fiscal stimulus package, and initiatives to free more resources for infrastructure development, along with measures to strengthen health-related interventions, are helping speed up recovery.”

The economy is projected to rebound in the last 3 quarters of FY2021, as reflected in improvements in electronic waybills, mobility data, and the purchasing managers’ index, it said. First-quarter GDP rebounded 20.1% from a year earlier even as the second wave of the pandemic curbed economic activity