ADB PROJECTIONS

Subject : International Organisation

Context : The Asian Development Bank (ADB) upgraded its forecast for the Indian economy, projecting 8% contraction in 2020-21 as compared to 9% estimated earlier, on the back of a faster-than-expected recovery. It retained its growth projection for the next fiscal at 8%.

Concept :

• Observing that the economy had begun to normalise, the Asian Development Outlook (ADO) Supplement said the second quarter contraction at 7.5% was better-than-expected.
• Highlighting that India was recovering more rapidly than expected, the ADB said the earlier South Asia forecast of 6.8% contraction was upgraded to (-)6.1% in line with an improved projection for India.
• Growth will return in 2021-22, at 7.2% in South Asia, the Asian lender added.
• Inflation, the ADB said, was expected to ease in the coming months, and maintained the 4% projection for 2021-22.
• Supply chain disruptions had taken food inflation to an average of 9.1% in the first 7 months of 2020-21, pushing headline inflation to 6.9% in the same period, the regional lender said.

Asian Development Bank

• ADB is a regional development bank established on 1966.
• ADB now has 68 members, 49 from within Asia.
• ADB’s five largest shareholders are Japan and the United States (each with 15.6% of total shares), the People’s Republic of China (6.4%), India (6.3%), and Australia (5.8%).
• It aims to promote social and economic development in Asia.
• ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.
• ADB is headquartered in Manila, Philippines.