ADB projects India's GDP to contract by 9% in 2020-21

by Nidhi Bhati

Asian Development Bank (ADB) expects the contraction in India’s real GDP for 2020-21 at nine per cent as the coronavirus pandemic weighs heavily on economic activity and consumer sentiment in the country. As mobility and business activities resume more widely, ADB projects a strong recovery for the Indian economy in 2021-22, with GDP growing by eight per cent. The agency further cautioned that the growth outlook remains highly vulnerable to either a prolonged outbreak or a resurgence of cases, with the country now having one of the highest number of Covid-19 cases globally. It further stated that inflation is expected to fall in the remainder of the current fiscal to 4.5 per cent with tamed food prices and decreased economic activity and then further decline to four per cent in 2021-22. India’s current account deficit is forecast to shrink to 0.3 per cent of GDP this fiscal year, then widen to 0.6 per cent of GDP in 2021-22 with exports expected to recover as global growth rebounds.