Large portion of India’s population expected to be vaccinated by 2022-2023, ADB says
The Indian government has assured that COVID-19 vaccines will be provided to all by December 2021.
The Asian Development Bank (AfDB) lowered its growth forecast for India for this year to 10% on Tuesday, from 11% expected in April, citing second-wave restrictions across states and expects the Most of the Indian population will be vaccinated by 2022-2023.
The Indian government has assured COVID-19 vaccines will be provided to everyone by December 2021, but AfDB comments suggest global observers are not convinced the target is being met.
A faster than expected surge in fuel and food prices in India also prompted the Bank to raise its average inflation projection for 2021-2022 to 5.5%, from the 5.2% expected earlier. The Reserve Bank of India (RBI) has projected retail inflation at 5.1% for this period.
Retail price inflation, which was around 6.3% in May and June, is also expected to stay above the Reserve Bank of India’s preferred target level of 4% in 2022-2023 to 4.8 %.
India’s average inflation in 2020-2021 was 6.2%, so AfDB projections suggest nearly three consecutive years of inflation hovering near the central bank’s upper tolerance limit of 6. % from the preferred midpoint of the 2% to 6% range it is to maintain, as per the mandate of the Monetary Policy Committee.
Inflation had exceeded the RBI’s comfort zone in December 2019 to reach 7.4%, the highest since July 2014. By March 2020, it had cooled to 5.91% before resurfacing to 6.2 % on average during the period 2020-21 affected by COVID.
India is expected to register 7.5% growth in FY2022-2023, the Bank said, down from 7% it had forecast earlier. The new outbreak of the COVID-19 pandemic has hampered economic activity across South Asia due to new containment measures, he said.
“South Asia’s growth outlook for fiscal 2021 is lowered to 8.9% from 9.5%. The forecast for India is revised down by 1.0 percentage point to 10.0%. Inflation forecasts for South Asia in 2021 are raised from 5.5% to 5.8%, mainly reflecting a higher forecast for India, â€the Bank’s economists said in a supplement to its Asian Development Outlook (ADO) report for 2021.
As India’s GDP growth fell back to 1.6% in the last quarter of 2020-2021, a second wave of the pandemic prompted many state governments to impose strict containment measures as new COVID-19 cases peaked at over 400,000 per day in early May, before moderating to over 40,000 in early July.
“The first indicators show a rapid recovery in economic activity after the relaxation of containment measures. The growth projection for fiscal 2021, lowered from 11% to 10%, reflects strong base effects. The projection for fiscal year 2022 (2022-2023), when a large part of the Indian population should be vaccinated, goes from 7.0% to 7.5% as economic activity normalizes â€, notes Supplement.
With the strengthening of commodity and fuel prices, the Bank also raised its annual inflation forecast for the Asia-Pacific region to 2.4% from 2.3% in April, with upward price trends ahead. to firm up to 2.7% next year. The region’s growth forecast has been tempered from 7.3% to 7.2% for this year.
