World Bank pegs India growth at 6.2% in FY15, 7.1% in F17

The global economy is set to get stronger in 2014, with growth likely to edge up to 3.2 percent this year, up from 2.4 percent in 2013, according a World Bank report. The Washington-based global lender, which released its Global Economic Prospects report late Tuesday, said India’s growth is projected to rise to over 6 percent in FY2014-15, and accelerate to 7.1 percent by FY2016-17.

The report noted that growth in South Asia expanded a modest 4.6 percent in 2013, reflecting weakness in India amid high inflation, and current account and government deficits. Talking about 2014-15 growth projection, Kaushik Basu chief economist at World Bank said: "We expect developing country growth to rise above 5 percent in 2014, with some countries doing considerably better, with Angola at 8 percent, China 7.7 percent, and India at 6.2 percent."  But rich economies such as the United States, Eurozone and Japan are likely to lead much of the global growth forecast.

According to the report, growth in the US is likely to increase to 2.8 percent in 2014, higher than 1.8 percent last year. The Euro area is finally set to put behind two years of de-growth and may notch 1.1 percent growth in the year.

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The report attributes the greater expected strength to these economies easing their austerity policies.

While growth in emerging economies is still below the record 2003-2007 levels, the difference reflects a cooling off of the unsustainable turbo-charged pre-crisis growth, according to the World Bank.

The report urged developing countries to implement structural reforms that would help raise the capacity of their economies, if they are to regain their pre-crisis growth rates.

“Global economic indicators show improvement,” World Bank Chief Economist Kaushik Basu said. “But one does not have to be especially astute to see there are dangers that lurk beneath the surface.”

The bank, however, also warned to the existing threat of a Federal Reserve monetary policy tightening that could weigh on global growth.

You may read the complete World Bank report here.