The Asian Development Bank (ADB) on Tuesday said the Indian economy will witness a contraction of 9 percent due to the difficulties caused by the ongoing COVID-19 pandemic.
"India’s gross domestic product (GDP) growth for fiscal year (FY) 2020 ending on 31 March 2021 is forecast to contract by 9 percent as the pandemic weighs heavily on economic activity and consumer sentiment in the country," the ADB stated in a report.
The report, however, says that the country's GDP is expected to grow at a rate of 8 percent in the following financial year, FY 2021-22 (April 2021-March 2022), as "mobility and business activities resume more widely".
On 31 August, the Indian government reported a massive contraction of 23.9 percent in the first quarter (trimester) of April - June this year, with all major economic sectors like manufacturing, construction, mining and electricity exhibiting negative growth.
In fact, after the release of the GDP numbers by the government, the major ratings agencies also revised their India growth projections downwards.
Goldman Sachs, for example, said in its revised estimates that India's economy will witness a 14.8 percent contraction, rather than the 11 percent contraction projected earlier. India Ratings said the economy will see negative growth of 11.80 percent, down from earlier estimates of a 5.30 percent contraction. Nomura, Fitch and ICRA also downgraded their growth projections for India against earlier estimates.