New Delhi : Asian Development Bank (Asian Development Bank) on Wednesday retained India’s growth forecast for FY12 at 10%, citing expected buoyancy in domestic demand and exports.
In its update to the Asian Development Outlook, ADB said GDP growth is expected to be 7.5% in FY13. “The forecast assumes a relatively limited economic impact from the pandemic due to rapid vaccination campaigns and better preparedness among businesses, households and the healthcare sector,” ADB said.
On Tuesday, the OECD cut its growth forecast for India to 9.7% for FY22 from 9.9%.
ADB Country Director for India Takeo Konishi said, “The Indian economy is showing encouraging signs of recovery as the effects of the second wave wear off. The government’s immunization campaign, its new fiscal stimulus package and infrastructure development Initiatives to free up more resources, along with measures to strengthen health interventions, are helping accelerate recovery.”
ADB forecast a rebound in the economy in the last three quarters of FY12, as reflected by improvements in e-way bills, mobility data and the Purchasing Managers’ Index. First quarter GDP rose 20.1% from a year ago, even as a second wave of the pandemic curbed economic activity.
Private consumption and investment are projected to remain weak due to the pandemic’s impact on household income, spending and borrowing. However, the government’s national monetization plan is expected to spur public investment to boost infrastructure development. “Growth in the agriculture sector will remain resilient, yet moderately slow with the spread of the pandemic in rural areas and a delayed monsoon. Exports will improve as global demand improves,” ADB said.
While the Reserve Bank of India is expected to continue its policy stance and reduce supply chain disruptions, inflation will rise to 5.5% in FY12 and 4.8% in FY13, the ADB said. that global prices for oil and other commodities as well as household food are rising. Inflationary pressure on prices will continue. “The trade deficit in FY12 is likely to widen on account of rising imports amid high domestic demand, before narrowing to 1.0% as economic growth in FY13,” it added.
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