The Asian Development Bank (ADB) on Tuesday projected a 9% decrease of the Indian economy in the financial year 2020-21, revising its outlook within three months as the Covid situation continues.
In the month of June, ADB had predicted a 4% contraction in the country\u2019s GDP in the current fiscal.<\/p>\n\n\n\n
The prediction comes just after the country reported a 23.9 % contraction in its GDP for the April-June quarter.<\/p>\n\n\n\n
According to the ADB report, the Indian economy had weakened even before the pandemic struck, the government enjoyed little fiscal space to respond.<\/p>\n\n\n\n
\u201cIndian GDP is expected to fall by 9% in the whole of this fiscal year and then grow by 8.0 per cent in the next,\u201d it said.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
Governments in the region responded with diverse policy measures, it said, citing the \u2018Developing\u2019 Asian countries.<\/p>\n\n\n\n
It noted that after nosediving at first, capital flows, financial markets, and currencies have recovered.<\/p>\n\n\n\n
Citing recent data, the ADB report said that the crisis may have bottomed out, but the picture across the region is mixed.<\/p>\n\n\n\n
It noted the different economic trajectory in China and India, as the former has moved towards a nascent recovery (as it has reported a total of 85,202 cases) while India continues to struggle (as the second worst-hit by the pandemic with over 49 lakh cases so far).<\/p>\n\n\n\n
\u201cIn particular, the two largest economies in the region are diverging as nascent recovery in the People\u2019s Republic of China (PRC) contrasts with continued fragility in India,\u201d it said.<\/p>\n\n\n\n
The report said that after containing its domestic outbreak relatively rapidly, China saw growth recover from 6.8 per cent contraction in the first quarter to 3.2 per cent growth in the second. By contrast, the outbreak in India has intensified since April, spreading fast from cities to rural areas.<\/p>\n\n\n\n
The covid-19 lockdown caused output to contract by 23.9% in the April-June quarter, and various high-frequency indicators, while improving somewhat, show continued economic weakness.<\/p>\n","protected":false},"excerpt":{"rendered":"
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