ADO revises India’s inflation to 5.8%
The Asian Development Bank (ADB) has projected an 8% contraction for the Indian economy in 2020-21, an upgrade from the 9% degrowth estimated earlier, saying the economy has begun to normalize.
The Asian Development Outlook (ADO) Supplement, released on 10 Dec 2020, said the second-quarter contraction at 7.5% was better than expected and a rebound from 23.9% contraction in the June quarter of the current fiscal on account of the coronavirus pandemic impact.
The ADO noted Reserve Bank Governor Shaktikanta Das’ optimism who says the economy is recuperating faster than anticipated and the growth rate is likely to turn positive in the second half of the current financial year.
Das sees the economic contraction at 7.5% for the whole year, an improvement on RBI’s previous projection of 9.5% contraction.
The supply chain disruption has raised food inflation to an average of 9.1% in the first seven months of 2020-21, pushing headline inflation to 6.9% in the same period. As such, ADO has revised India’s inflation to 5.8% from 4.5% for the current fiscal year. #economy #manufacturing #investment #banking /fiinews.com
