The Asian Development Bank on Thursday lowered India’s growth forecast for 2019-20 to 7 per cent from 7.2 per cent estimated earlier over concerns about fiscal shortfall.
“The growth outlook for India has been cut to 7.0 per cent in 2019 and 7.2 per cent in 2020 because the fiscal 2018 outturn fell short,” said the development lender in a supplement to its Asian Development Outlook.
In South Asia, the economic outlook is robust, with growth projected at 6.6 per cent in 2019 and 6.7 per cent in 2020, albeit lower than forecast in April.
Developing Asia will maintain strong but moderating growth over 2019 and 2020, as supportive domestic demand counteracts an environment of global trade tensions, according to the report.
ADB maintains growth forecasts for developing Asia at 5.7 per cent in 2019 and 5.6 per cent in 2020-unchanged from its April forecast. These growth rates are slightly down from developing Asia’s 5.9 per cent growth in 2018. Deepening trade tension between China and the United States remains the largest downside risk to this outlook, despite an apparent truce in late June that could allow trade negotiations between the two countries to resume. “Even as the trade conflict continues, the region is set to maintain strong but moderating growth,” said ADB Chief Economist Yasuyuki Sawada. “However, until the world’s two largest economies reach agreement, uncertainty will continue to weigh on the regional outlook.”Developing Asia’s inflation projections were revised up from 2.5 per cent to 2.6 per cent for both 2019 and 2020, reflecting higher oil prices and various domestic factors, such as the continuing outbreak of African swine fever in several Asian economies, which is expected to drive up pork prices in China. UNI SRJ