The Asian Development Bank (ADB) lowered India's economic growth forecast to 10 per cent from 11 per cent for 2021- down by one percentage point, following the severe second wave of COVID-19 pandemic in the country. In its latest economic outlook report, the multilateral funding agency said that the spike in the number of COVID-19 cases during the second wave of the pandemic affected economic recovery.
"The outbreak, however, dissipated faster than anticipated, resulting in several states easing lockdown measures and returning to more normal travel patterns,'' said ADB in its report. However, India's economic growth outlook for next year has improved to 7.5 per cent from seven per cent.
The regional development bank lowered its 2021 economic growth outlook for developing Asia due to COVID-related concerns in the countries. It projects a growth of 7.1 per cent this year, compared to a projection of 7.3 per cent made in April this year.
For 2022, the growth outlook is raised to 5.4 per cent from 5.3 per cent, according to ADB. New variants of COVID-19, the reinstatement of various levels of lockdown restrictions, renewed local outbreaks, and slow, uneven vaccine rollouts are weighing down the region's growth prospects.
Earlier in the year, the International Monetary Fund (IMF) downgraded India's growth projection from 12.5 per cent to 9.5 per cent for the current fiscal 2021-22 - down by three percentage points, due to the impact of the second wave of COVID-19 in the country. For the current financial year, India registered the largest drop in growth projections made by IMF, even as the global economic growth rate was retained at six per cent.