ADB cuts India growth forecast to 10%, sees faster inflation at 5.5%

The ADB said a deficient monsoon could augur further inflationary pressure.

The Asian Development Bank has cut its forecast for India’s GDP growth in 2021-22 to 10%, from 11% projected earlier, with downside risks dominating the economic outlook. The ADB also sees rising input costs fuelling inflation to a faster 5.5% pace, than the 5.2% previously estimated.

While the COVID-19 second wave has disrupted the economic recovery since the ADB’s April forecast for 11% growth, the Bank expects the economy to ‘rebound strongly in the remaining three quarters and grow by 10% in the full fiscal year before moderating to 7.5%’ in 2022-23.

Still, the risks to the outlook tilt to the downside and depend mainly on the evolution of the pandemic, the ADB’s director of macroeconomic research Abdul Abiad told The Hindu.