The Asian Development Bank (ADB) on Thursday upgraded its forecast for the Indian economy, projecting 8 per cent contraction in 2020-21 as compared to 9 per cent degrowth estimated earlier, on the back of faster than expected recovery.
Observing that the economy has begun to normalise, the Asian Development Outlook (ADO) Supplement said the second quarter contraction at 7.5 per cent was better than expected.
The economy contracted by 23.9 per cent in June quarter of the current fiscal on account of the impact of the coronavirus pandemic.
“The GDP forecast for FY2020 is upgraded from 9.0 per cent contraction to 8.0 per cent, with GDP in H2 probably restored to its size a year earlier. The growth projection for FY2021 is kept at 8.0 per cent,” it said.
Highlighting that India is recovering more rapidly than expected, the report said the earlier South Asia forecast of 6.8 per cent contraction is upgraded to (-)6.1 per cent in line with an improved projection for India.
Growth will return in 2021-22, at 7.2 per cent in South Asia and 8 per cent in India, it added.