Asian Development Bank (ADB) on Thursday lowered India’s GDP growth forecast to 7 per cent for the current year owing to the fiscal shortfall concerns.
“India is expected to grow by 7 per cent in 2019 (FY-2020) and 7.2 per cent in 2020 (FY-2021), slightly slower than projected in April because the fiscal 2018 outturn fell short,” ADB said in the July edition of its supplement -Asian Development Outlook (ADO) 2019.
“Overall, the South Asian outlook remains robust, with growth projected at 6.6% in 2019 and 6.7% in 2020,” added the report.
China is expected to grow by 6.3% in 2019 and 6.1% in 2020.
India’s growth forecast in the report is in line with the Economic Survey 2018-19 which Union Finance Minister Nirmala Sitharaman had tabled in Parliament in the Budget session. The survey had also predicted a 7 per cent GDP growth in FY20.
The survey had outlined strategic blueprint to achieve Prime Minister Narendra Modi’s vision for $5 trillion economy.
Earlier this month, credit rating agency Moody’s Investors Service had said that India has continued to face fiscal challenges, despite lower deficit target in the full Budget 2019-20.
In its analysis of the full Budget 2019-20, Moody’s had said that weak growth prospects for India will complicate the government’s fiscal consolidation efforts, weighing on the sovereign credit quality.