The Asian Development Bank on Tuesday lowered India’s economic growth forecast for the financial year 2021-2022 to 10% from its projection of 11% released in April.

The funding agency said that the reduction in the growth forecast “reflects large base effects [inflation in the corresponding period of the previous year]”.

“The projection for FY2022 [financial year 2022-2023], by which time much of India’s population is expected to be vaccinated, is upgraded from 7.0% to 7.5% as economic activity normalizes,” the funding agency said in its Asian Development Outlook Supplement report.

The agency also said that India’s Gross Domestic Product growth recovered to 1.6% in the last quarter of the fiscal year 2020-2021, “narrowing contraction in the whole fiscal year from 8% estimated in April to a revised 7.3%”. Early indicators show “economic activity resuming quickly after containment measures eased”, the statement said.

The Asian Development Bank said that economic recovery was under way in developing Asia, adding that the growth projection for this year was revised slightly from 7.3% in April to 7.2%.

“The economic outlook for South Asia is dampened by new waves of COVID-19 hitting the subregion from March to June 2021,” the report said. “The adverse economic impact of these new waves is expected to be limited, with businesses and consumers better able to adapt to the pandemic and containment measures now than they were a year ago.”

The funding agency downgraded the economic growth forecast in the sub-region from “9.5% in ADO [Asian Development Outlook] 2021 to 8.9%”. But it upgraded the prediction for financial year of 2022-2023 from 6.6% to 7.0%.

“Expansion in the People’s Republic of China is still projected at 8.1% in 2021 and 5.5% in 2022 as favorable domestic and external trends align with April forecasts,” the report said.

On June 8, the World Bank slashed its growth forecast for India for 2021-2022 financial year to 8.3% from 10.1% estimated in April. The agency attributed it to the devastating second wave of the coronavirus pandemic that slowed down the economic revival in early 2021.

The global economy was expected to grow 5.6% in 2021-’22, the World Bank said in June. This is the fastest post-recession pace in 80 years. Among the major economies, the United States’ growth was projected to be growing at 6.8% while China is expected to report a 8.5% growth.

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World Bank cuts India’s GDP growth forecast to 8.3% from 10.1% for 2021-’22