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India’s GDP to Contract by 9% & Developing Asia by 0.7% in FY2020 amid COVID-19 : ADB

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India's-GDP-to-contract-by-9-pct-in-FY2020-amid-COVID-19In accordance with the “Asian Development Outlook (ADO) 2020 Update-September 2020” by Asian Development Bank (ADB), India’s GDP (gross domestic product) growth will contract 9% in FY2020-2021 due to COVID-19 induced slowed economic activity. On the other hand it forecasted a strong recovery with GDP to grow by 8% in FY2021-22 as mobility and business activities resume more widely.

  • The fiscal deficit of India is expected to rise significantly in FY2020 as government revenues fall and expenditures rise.
  • ADB also predicted that inflation is expected to fall in the remainder of FY2020 to 4.5% with rising food prices and decreased economic activity, and then further decline to 4% in FY2021. 
  • India’s current account deficit is forecast to shrink to 0.3% of GDP this fiscal year, then widen to 0.6% of GDP in FY2022 with exports expected to recover as global growth rebounds. 

On front of Developing Asia:

Developing Asia’s GDP is expected to contract by 0.7% from earlier estimate of 0.1% in 2020 and is projected to grow by 6.8% in 2021. This is for the first time that regions GDP will contract since the early 1960s. The ADO projected the region’s “swoosh-shaped” or “L-shaped” recovery in FY21 with a growth og 6.8%. 

  • Excluding high-income newly industrialized economies, regional GDP is expected to contract by 0.5% this year before growing by 7.2% next year. 
  • The inflation forecast is revised down from 3.2% to 2.9% for 2020 and maintained at 2.3% for 2021.

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About Asian Development Bank (ADB):
Headquarters– Mandaluyong, Philippines
Membership– 68 countries
President– Masatsugu Asakawa