The country’s gross domestic product (GDP) growth may slip to 8.2 per cent in the current financial year 2021-22, if the ongoing second wave of the COVID-19 pandemic peaks by June-end, said rating agency Crisil. However, the agency maintained its baseline estimate of an 11 per cent growth, but the risk is firmly tilted downwards to the projection of 11 per cent growth in the current financial year. Crisil said that the impact of second-wave on the economic recovery can further hit capital inflows. (Also Read: Real GDP Growth Forecast For 2021-22 Revised To 10.1%: Credit Rating Agency )
The rating agency gave two scenarios. In a moderate scenario under which the second wave peaks by May-end, the GDP growth will drop to 9.8 per cent but will slip to 8.2 per cent in a severe scenario. In both cases, the permanent loss to GDP over the medium-term will rise to 12 per cent from 11 per cent in the base case.
Meanwhile, the Asian Development Bank or ADB projected the economic growth at 11 per cent for the current financial year, amid strong vaccine drive, but cautioned that the surge in new cases may put the economic recovery at risk. (Also Read: India’s GDP To Grow At 11% In This Fiscal, Says Asian Development Bank )
Asian Development Bank added that the country’s GDP is expected to expand at seven per cent for the financial year 2021-22. Additionally, the gross domestic product of South Asia is expected to rebound to 9.5 per cent this year, following a contraction of six per cent in 2020. ADB stated that the economic growth in developing Asia is set to rebound to 7.3 per cent this year, on the back of healthy global recovery and early progress on COVID-19 vaccines. The projected resurgence follows a 0.2 per cent contraction last year, said ADB.