India’s GDP expected to contract 9 Percent in FY21: ADB

The Asian Development Bank (ADB) on Tuesday projected a 9 percent contraction of the Indian economy in the financial year 2020-21, revising its outlook within three months as the Covid situation continues.

In June, ADB had predicted a 4 percent contraction in the country’s GDP in the current fiscal.

The forecast comes just over a fortnight after the country reported a 23.9 per cent contraction in its Gross Domestic Product (GDP) for the April-June quarter.

The ADB report noted that the Indian economy having weakened even before the pandemic struck, the government enjoyed little fiscal space to respond.

“Indian GDP is expected to fall by 9 per cent in the whole of this fiscal year and then grow by 8.0 per cent in the next,” it said.

On South Asia, ADB says that the sub-region is now expected to shrink by a steep 6.8 per cent in 2020 and rebound by 7.1 per cent in 2021.

It noted that as the Coronavirus (Covid-19) continued to expand regionally and globally, containment measures to counter the pandemic stifled economic activity. Domestic demand and production plummeted, plunging global economic activity and slashed external demand, it added.

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