Indian economic system to shrink by 9% this fiscal: Asian Development Bank

Workers sort sun-dried fabrics in a dyeing factory in Narayanganj Bangladesh. REUTERS

ADB has provided an initial assistance of United States dollars 600 million in loans and USD 4.4 million in grants for managing socio-economic impacts of the COVID-19 pandemic and supporting quick recovery.

On Monday, rating agency S&P Global Ratings also projected the India economy to contract by 9% while last week Fitch Ratings and Moody's Investors Service cut their GDP estimates for FY21 to contraction of 14.8% and 11.5% respectively, while investment bank Goldman Sachs sees GDP to shrink by 10.5% during the financial year.

The bank's Asian Development Outlook Update shows about three-quarters of the region's economies are forecast to slump this year.

In contrast, India, which is one of the hardest hit countries in the world with over 4.8 million infections despite lengthy lockdowns, is expected to shrivel by nine percent in 2020 before expanding by eight percent next year.

2020 Update forecasts -0.7% gross domestic product (GDP) growth for developing Asia this year-marking its first negative economic growth since the early 1960s.

China's economy is expected to rebound by 7.7% in 2021, while India will also bounce back with 8% growth next year, the ADB says. Growth is forecast to accelerate to 7.7% in 2021, up from a previous forecast of 7.4%.


The ADB predicted Korea's inflation to remain muted in 2020, with both demand and commodity prices subdued, and then pick up in 2021.

According to the report, the growth outlook remains highly vulnerable to either a prolonged outbreak or a resurgence of cases, with the country now having one of the highest number of Covid-19 cases globally. "Consistent and coordinated steps to address the pandemic, with policy priorities focusing on protecting lives and livelihoods of people who are already most vulnerable, and ensuring the safe return to work and restart of business activities, will continue to be crucial to ensure the region's eventual recovery is inclusive and sustainable".

China, where the virus first emerged late past year before developing into a pandemic that has infected more than 29 million people worldwide, is one of the few economies in the region to expand. To mitigate the chance, governments within the area have delivered wide-ranging coverage responses together with coverage assist packages - primarily earnings assist - amounting to three.6 trillion or equal to about 15 per cent of regional GDP.

Governments in the region responded with diverse policy measures, it said, citing the "Developing" Asian countries. Forecasts suggest that most of developing Asia will recover next year, except for some economies in the Pacific. Some economies heavily reliant on trade and tourism, particularly in the Pacific and South Asia, face double-digit contractions this year.

The inflation forecast for creating Asia is revised downwards to 2.9 per cent this 12 months from 3.2 per cent forecast in April on account of continued low oil costs and weak demand.

Related:

Comments

Latest news

Member of Giants organization tests positive for COVID-19, forcing postponements
ESPN reported late Friday that Petco Park has been chosen to host ALDS games and the ALCS in MLB's version of a postseason bubble. According to The San Diego Union-Tribune, the positive test came from a Giants player.

China, EU to reach investment agreement within 2020, signed food protection deal
The EU's goals include eliminating limits on EU investment in China such as equity caps and joint venture requirements. Brussels has preferred a middle path, treating Beijing as both a potential partner and a "systemic rival".

Hundreds of Arizona fire crews assigned to out-of-state wildfires
Millions of dollars are spent on such reduction efforts every year in Western states though many argue more needs to be done. She added: "This is a wake-up call for all of us that we've got to do everything in our power to tackle climate change".

OPEC further cuts world oil demand forecasts
Yesterday, Tropical storm Sally, picked up its strength in the Gulf of Mexico, west of Florida, and was turning to become a category 2 hurricane.

Chris Hemsworth Not Leaving Marvel Following Thor 4
How excited are you to see Chris Hemsworth back as Thor in Thor : Love and Thunder? He joked that Thor is too young to retire. As ever with the Marvel Cinematic Universe , Thor: Love and Thunder is one of several films in the pipeline.

Other news