The Asian Development Bank has said that India’s economy will contract by 9% in the 2020-’21 financial year, PTI reported. The contraction in the Gross Domestic Product is the result of lack of economic activity due to a lockdown imposed to curb the spread of the coronavirus.
“India imposed strict lockdown measures to contain the spread of the pandemic and this has had a severe impact on economic activity,” Asian Development Bank Chief Economist Yasuyuki Sawada said. “It is crucial that containment measures, such as robust testing, tracking, and ensuring treatment capacities, are implemented consistently and effectively to stop the spread of Covid-19 and provide a sustainable platform for the economy’s recovery for the next fiscal year and beyond.”
However, the Asian Development Bank also predicted that the Indian economy will recover strongly to grow at 8% in 2021-’22.
On September 8, American credit rating agency Fitch Ratings had sharply lowered its growth forecast for India, saying that the country’s Gross Domestic Product for the financial year 2020-’21 is expected to contract by 10.5%, instead of its earlier estimate of a 5% contraction. The agency, however, forecast that India’s economy will grow by 11% in the financial year 2021-’22 and 6% in 2022-’23.
Domestic rating agency India Ratings and Research, meanwhile, revised India’s GDP growth forecast for the financial year 2020-’21 to -11.8% from -5.3%. The agency added that it expects India’s GDP to rebound and grow at 9.9% year-on-year in the financial year 2021-’22 due to a weak base in 2020-’21. The agency, however, warned that all economic indicators, including mobility and consumption, were pointing towards weaker economic recovery.
Government data published earlier this month showed that the country’s GDP contracted by 23.9% for the April to June quarter due to the escalating coronavirus crisis.
India coronavirus tally on Tuesday rose to 49,30,236 as it reported 83,809 new cases in the last 24 hours. The toll rose by 1,054 to 80,776.