The Asian Development Bank has cut its forecast for India’s GDP growth in 2021-22 to 10%, from 11% projected earlier, with downside risks dominating the economic outlook. The ADB also sees rising input costs fuelling inflation to a faster 5.5% pace, than the 5.2% previously estimated.
While the COVID-19 second wave has disrupted the economic recovery since the ADB’s April forecast for 11% growth, the Bank expects the economy to ‘rebound strongly in the remaining three quarters and grow by 10% in the full fiscal year before moderating to 7.5%’ in 2022-23.
Still, the risks to the outlook tilt to the downside and depend mainly on the evolution of the pandemic, the ADB’s director of macroeconomic research Abdul Abiad told The Hindu.
“The primary risks are centred around the pandemic,” said Dr. Abiad. “Until we get to the point that we have really widespread vaccination, countries still are at risk of renewed outbreaks as the Delta variant is much more infectious. So the main risk weighing on the outlook is if vaccination hasn’t progressed widely, the health system gets strained and the government needs to put restrictions on mobility again,” he explained.
News Source : Mint
