The Asian Development Bank (ADB) has lowered India's gross domestic product (GDP) growth forecast to 6.5 percent for the current fiscal (FY20), weighed down by the GDP growth slipping to a six-year low in the April-June quarter of 2019-20. In its supplement to the Asian Development Outlook (ADO) in July, it had cut the country's GDP growth estimate to 7 percent for FY20 on the back of fiscal shortfall concerns.
ADB said that abrupt declines in manufacturing and investment reflect uncertainty ahead of general elections, subdued lending by banks and other financial institutions, stress in the rural economy, and a weakening external outlook.
However, it said India is expected to rebound to 7.2 percent growth in FY21 and join most other sub regional countries in performing at or near their ADO 2019 growth forecasts for next year. As per the latest ADO, South Asia's growth momentum has softened. For the region, the growth forecasts are lowered to 6.2 percent for 2019 and 6.7 percent for 2020.