India's economy will contract at slower pace of 8%: ADB

Economies around the world were battered by coronavirus pandemic, whose origins have been traced to China. The raging health crisis has taken 1,577,797 lives worldwide and infected 69,335,250.

ADB Chief Economist Yasuyuki Sawada underscored its impact would still derail growth.

But he added that some countries are recovering faster. "Growth projections have been upgraded for China and India, the region's two largest economies," he said.

About India, the Asian Development Outlook Supplement noted the contraction in the second quarter was better than expected — at 7.5%.

"The GDP forecast for FY2020 is upgraded from 9.0% contraction to 8.0%, with GDP in H2 probably restored to its size a year earlier. The growth projection for FY2021 is kept at 8%," the bank said.

These predictions are similar to RBI's forecast.

Last week, RBI's Governor Shaktikanta Das revised the real GDP growth projection for 2020-21 to -7.5%, after initially predicting it at -9.5%.

About the revival of the economy, Das had said, "The recovery in rural demand is expected to strengthen further while urban demand is also gaining momentum. India's time has come to break free of the fetters of COVID-19 and reconfigure our destiny."

About developing Asia, a group of 45 nations in the Asia-Pacific region, ADB said its economic output could shrink by 0.4%, a minuscule improvement from the earlier estimate of 0.7%.

In 2021, the region could register a growth of 6.8%.

East Asia is expected to grow at 1.6%, steered by the quick recoveries in China and Taiwan.

ADB expects regional inflation to reach 2.8% in 2020, a change from the September prediction of 2.9%.

For the current fiscal, ADO revised India's inflation from 4.5% to 5.8%.

"A prolonged pandemic remains the primary risk but recent developments on the vaccine front are tempering this. Safe, effective, and timely vaccine delivery in developing economies will be critical to support the reopening of economies," Sawada added.