MANILA: Asian Development Bank expects India's economy to contract by 9% in FY2020-21 as against 4% forecast in June as the Covid-19 pandemic weighs heavily on economic activity and consumer sentiment in the country.
The revision comes on the back of S&P Ratings and Nomura changing their forecasts to a sharper contraction of 9% for India's economy in the current financial year as against their earlier expectations.
ADB, however, forecasts a strong recovery for India's economy in FY2021-22 in its Asian Development Outlook (ADO) 2020 Update, with gross domestic product (GDP) to grow by 8% as mobility and business activities resume more widely.
“India imposed strict lockdown measures to contain the spread of the pandemic and this has had a severe impact on economic activity,” said ADB Chief Economist Yasuyuki Sawada.
“It is crucial that containment measures, such as robust testing, tracking, and ensuring treatment capacities, are implemented consistently and effectively to stop the spread of Covid-19 and provide a sustainable platform for the economy’s recovery for the next fiscal year and beyond,” he said.
