The Asian Development Bank (ADB) has improved the growth forecast for India, sub-region South Asia’s largest economy, from a contraction of 9 percent to a contraction of 8 percent for fiscal 2020.

Observing that the economy has started to normalize, the Asian Development Outlook (ADO) Supplement said the second-quarter contraction at 7.5 percent was better than expected. The economy contracted by 23.9 percent in June quarter of the current fiscal on account of the impact of the coronavirus pandemic.

"The Gross Domestic Product forecast for FY2020 is upgraded from 9.0 percent contraction to 8.0 percent, with GDP in H2 probably restored to its size a year earlier. The growth projection for FY2021 is kept at 8.0 per cent," it said.

Highlighting that India is recovering more rapidly than expected, the report said the earlier South Asia forecast of 6.8 percent contraction is upgraded to (-)6.1 percent in line with an improved projection for India.

Growth will return in 2021-22, at 7.2 percent in South Asia and 8 percent in India, it added.

Earlier this month, Reserve Bank Governor Shaktikanta Das had said the economy is recuperating faster than anticipated and the growth rate is likely to turn positive in the second half of the current financial year.

Job revival halts in November, says CMIE

Fitch Ratings expects Aviation sector recovery to be gradual

Atmanirbhar Bharat Package: FM gives progress report