ADB slashes forecast for current fiscal to 5.4%

The Asian Development Bank (ADB) on Friday slashed India’s growth forecast to 5.4 per cent in the current fiscal, just two months after it had made a projection of 5.6 per cent growth for Asia’s third largest economy.

Further, ADB said in its Supplement to the ‘Asian Development Outlook (ADO) 2012’ that “India’s growth forecast is revised from 5.6 to 5.4 per cent in fiscal year 2012 and from 6.7 to 6.5 per cent in FY 2013-14.” With this, ADB has slashed the growth estimates for India for the fourth time.

In the ADO released in April, ADB had projected India to grow at 7 per cent. However, it lowered its estimate to 6.5 per cent in July and further to 5.6 per cent in the ADO October update citing falling global demand and impact of delayed monsoon on agricultural production.

Developing Asia

As regards developing Asia, comprising 45 nations, ADB lowered its 2012 growth forecast marginally to 6 per cent from 6.1 per cent. It also revised the growth outlook downward for 2013 to 6.6 from 6.7 per cent projected earlier.

The growth performance in developing Asia has remained subdued so far with downside developments slightly outweighing positive events, ADB said, adding “the region should pick up steam in 2013”.

India’s economy has slowed in the recent years on the back of both domestic and global factors. Economic growth fell to a nine-year low of 6.5 per cent in the 2011-12 fiscal and is expected to be 5.8 per cent in the current fiscal, as per RBI estimates.

In the first half of the current fiscal, the economy grew by 5.4 per cent, against 7.3 per cent in the same period last fiscal.