Asian Development Bank cuts India’s 2016 growth estimate from 7.4% to 7%
On account of demonetisation, the Asian Development Bank on Tuesday cut down its 2016 growth estimate for India to 7 per cent from the previous 7.4 percent, weak investment and agricultural slowdown.
On account of demonetisation, the Asian Development Bank on Tuesday cut down its 2016 growth estimate for India to 7 per cent from the previous 7.4 percent, weak investment and agricultural slowdown. But India’s growth forecast for 2017 was kept at 7.8 percent.
Keeping India’s growth forecast for 2017 at 7.8 percent, ADB report said “Economic growth in developing Asia remains broadly stable, but a slight slowdown in India has trimmed the region’s growth outlook for 2016.”
In a supplement to its Asian Development Outlook 2016 Update report, ADB has trimmed 2016 growth for Asia to 5.6 percent from its previous projection of 5.7 percent.
“India’s tempered growth projection to 7 percent from the previously forecast 7.4 percent in 2016 is due to weak investments, a slowdown in the country’s agriculture sector, and lack of available cash due to the government’s decision to ban high-denomination banknotes,” ADB said.
The ban of old 500 and 1,000 rupee notes will likely affect largely cash-based sectors in the country, including small- and medium-scale businesses.
“The effects of the transition are expected to be short- lived and the Indian economy is expected to grow at 7.8 percent in 2017,” it said.
As per ADB, South Asia is the most dynamic part of the region, with growth expected at 6.6 percent this year, down from the previous forecast of 6.9 percent. South Asia’s growth is estimated at 7.3 per cent in 2017.