economy

ADB cuts India GDP growth estimate further to 9.7% in FY22

ADB cuts India GDP growth estimate further to 9.7% in FY22

The Asian Development Bank (ADB) for the second time in three months has scaled down Indias growth estimate for the fiscal year ending March 2022 due to supply chain issue of industries. Indias economy expanded 8.4% in the September quarter from a year earlier, the fastest pace among major economies but economists said disruptions from the new virus variant risked slowing the recovery. The Manila-based multilateral development bank pegged Indias growth estimate at 9.7% for the current fiscal year in its latest supplement. The ADB had projected a growth rate of 10% for FY22 in its September supplement. In a supplement to the Asian Development Outlook (ADO) 2021, it said South Asia is forecast to grow at 8.6% in 2021, compared with the Septembers forecast of 8.8%. India, South Asias largest economy, is now expected to grow 9.7% in fiscal year (FY) 2021, which ends 31 March 2022. The reduction of 0.3 percentage points comes amid supply chain issues that are affecting industry. Indias outlook for FY2022 is maintained at 7.5%, as domestic demand is expected to normalize, as per the ADB supplement. In September, it had revised down Indias economic growth forecast for the current fiscal to 10%, from 11% predicted earlier, citing the adverse impact of the second wave of the pandemic. Ratings agency Fitch has also cut the economic growth projections for India marginally to 8.4% for the current financial year from earlier forecast of 8.7% due to a slowdown in rebound of the economy post the second Covid wave. However, the Reserve Bank of India (RBI) has retained the GDP growth forecast for the current financial year at 9.5%. Consumption demand has been improving and rural demand is showing resilience. Urban demand has also shown signs of strengthening. The recent cut in petrol and diesel prices will also support demand, governor Shaktikanta Das said. Download.

economy 2021-12-14 Livemint