India’s financial restoration sooner than anticipated: ADB

Tribune News Service

New Delhi, December 10

The Asian Development Bank (ADB) has improved the growth forecast for India, sub-region South Asia’s largest economy, from a contraction of 9% to a contraction of 8% for fiscal 2020.

Growth forecast

  • Observing that the economy has begun to normalise, the Asian Development Outlook Supplement said the second quarter contraction at 7.5% was better than expected

  • The economy contracted by 23.9% in June quarter of the current fiscal on account of the impact of the coronavirus pandemic

In a supplement to its Asian Development Outlook (ADO) 2020, the ADB improved the forecast for the South Asia region to a contraction of 6.1% in 2020, up from the 6.8% contraction it had expected in September.

The latest assessment has upgraded growth projections for China and India, the region’s two largest economies. Overall, economic activity in developing Asia is forecast to contract by 0.4% this year, before picking up to 6.8% in 2021 as the region moves toward recovery from the effects of the pandemic, it said.

“The prospects are diverging within the region, with East Asia set to grow this year while other sub-regions are contracting,” said the report.

Most of developing Asia’s subregions are forecast to contract this year but East Asia is the exception, with an upgraded growth forecast of 1.6% for 2020 on the back of faster-than-expected recoveries in China and Taiwan. East Asia’s growth outlook for 2021 has been maintained at 7%.

“A prolonged pandemic remains the primary risk, but recent developments on the vaccine front are tempering this. Safe, effective, and timely vaccine delivery in developing economies will be critical to support the reopening of economies and the recovery of growth in the region,” it said.

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