ADB trims India 2021 growth outlook to 10%
The Asian Development Bank (ADB) lowered India's GDP growth forecast for 2021 to 10% from 11% previously.
However, it stated that the projection for the coming year has improved to 7.5% from 7%.
The Asian Development Bank decreased its economic growth forecast for developing Asia for 2021, citing continued fears about the coronavirus illness (Covid-19) pandemic.
According to an update to its flagship economic book, Asian Development Outlook (ADO) 2021, it anticipates growth of 7.1% this year. This compared to an April forecast of 7.3%.
Growth forecasts for 2022 have been increased to 5.4% from 5.3%. The region's prospects are harmed by new Covid-19 variations, resurgent local outbreaks, the restoration of varying levels of restrictions and lockdowns, and tardy and unequal vaccine rollouts.
“Developing Asia is vulnerable to the Covid-19 pandemic as new varieties cause outbreaks, reinforcing travel restrictions in some economies,” ADB Acting Chief Economist Joseph Zveglich Jr. warned.
“Policy measures should not only focus on containment and vaccination, but also on sustaining support to businesses and households and reorienting sections of the economy to adapt to a 'new normal' once the epidemic subsides, in order to jump-start the recovery,” he said.
Covid-19 instances have increased in developing Asia after the virus's Delta strain surfaced in April. Daily new cases reached a peak of 430,000 in May. On August 31, more than 163,000 new cases were reported daily.
Meanwhile, progress in vaccination in developing Asia continues to be uneven and lags behind that in advanced economies. As of August 31, 28.7% of the region's population had received all vaccines, compared to 51.8% in the United States and 58% in the European Union.
Within the region, the recovery process continues to be unequal. East Asia's GDP prediction for this year has been increased to 7.6% from 7.4% in April, as increased global demand boosts the region's exports.
East Asia's growth expectations remain steady at 5.1% through 2022. China, the region's largest economy, is expected to grow at an annual rate of 8.1% in 2021 and 5.5% in 2022.
The estimate for Central Asian economies this year has been revised upward to 4.1% from 3.4% in April, owing to improving prospects in Armenia, Azerbaijan, Georgia, Kazakhstan, and Uzbekistan. The subregion's forecast for 2022 has been increased to 4.2% from 4%.
The ADB forecasts economic growth of 8.8% in South Asia this year, down from the subregion's April prediction of 9.5%. However, the prognosis for 2022 has been upgraded to 7% from 6%.
Southeast Asia and the Pacific predictions have also been cut, as economies in these subregions continue to struggle with new virus varieties, ongoing lockdowns and restrictions, and sluggish vaccination rollouts.
Southeast Asia's growth expectations for 2021 and 2022 have been revised downward to 3.1% and 5% from 4.4% and 5.1% in April.
The Pacific economy is expected to decrease by 0.6% this year, down from the 1.4% growth forecast in April, before increasing by 4.8% in 2022.
In emerging Asia, inflation is predicted to stay stable at 2.2% this year and 2.7% in 2022. The current trend of rising international commodity and food prices has the potential to ignite inflation in several of the region's countries.