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ADB lowers India’s inflation forecast to 4.1% in FY20
Jul-22-2019

Asian Development Bank (ADB) in its supplement to Asian Development Outlook (ADO) 2019 has lowered the inflation forecast for India by 0.2 percentage points to 4.1 percent during the current financial year ending in March 2020 (FY20) and 4.4 percent in FY21. It has lowered inflation forecast in light of a smaller-than-expected uptick in food inflation, a strengthening Indian rupee since October 2018, and a lower Gross Domestic Product (GDP) growth forecast of the country.

In its report, ADB said India will be the main driver to lower the inflation for the South Asian region. It added that South Asia's inflation forecast for 2019, was revised down from 4.7 percent to 4.5 percent, mainly reflecting lowered forecasts for India.

According to the ADO supplement, inflation projections for developing Asia were revised up a notch from 2.5 percent to 2.6 percent in both 2019 and 2020, reflecting higher oil prices and several domestic factors. It also said price fluctuations for brent crude oil continue amid various concerns affecting both supply and demand.

The ADO supplement has lowered India's GDP growth forecast by 0.2 percentage points to 7 percent in 2019-20 from 7.2 percent projected in April, on the back of fiscal shortfall concerns. It also lowered its GDP growth forecast for FY 2020-21 to 7.2 percent from 7.3 percent projected earlier.

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