World Bank expects Indian economy to grow 5.7% in FY14

World Bank expects India’s GDP at factor cost to grow 5.7 per cent in 2013-14 and then accelerate to 6.5 per cent and 6.7 per cent in the two subsequent financial years, respectively. The multilateral lending agency said this in its Global Economic Prospects report released recently.

In 2012-13, the economy expanded at a decade-low pace of 5 percent. The report notes that growth in South Asia would primarily be driven by an estimated pick-up in India.

During 2013-15, the bank expects exports and private investment, which slowed sharply last year, to recover and provide a boost to growth.

But the report expect the robustness of the recovery to depend on the pace of policy and fiscal reforms, as well as downside risks.

The report points out that India has become more vulnerable to a sudden reversal of global investor sentiment owing to greater dependence on foreign investment inflows to finance current account deficit.

The report identifies an unanticipated monetary tightening in some high-income countries, resurgence of debt tensions, escalation of geopolitical conflict as some of the risks that may adversely affect economic recovery in India.