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Daily News Analysis

ADB narrows India’s FY21 GDP contraction projection to 8%

11th December, 2020 Economy

Context: Supply chain disruptions had taken food inflation to an average of 9.1% in the first 7 months of 2020-21.  Asian lending agency cites faster-than-expected recovery, sees inflation at 5.8%

  • 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.
  • ADB raised India’s inflation projection for the current fiscal to 5.8%, from 4.5%.

Asian Development Bank (ADB)

  • The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966.
  • The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly the Economic Commission for Asia and the Far East or ECAFE) and non-regional developed countries.
  • From 31 members at its establishment, ADB now has 68 members.
  • ADB is an official United Nations Observer.
  • The ADB defines itself as a social development organization that is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
  • ADB provides direct financial assistance, in the form of debt, equity and mezzanine finance to private sector companies, for projects that have clear social benefits beyond the financial rate of return.