Indian economy is likely to grow at 5 percent in 2014 and record a slightly higher expansion of 5.5 percent in 2015 on the back of stronger consumption and investment, according to the UN World Economic Situation and Prospects (WESP) 2014 report.
At present, Indian economy is struggling with slowdown and its growth slowed down to a decade low at 4.5 percent in FY13 and 4.6 percent during the first three quarter of FY14. The factors like high interest rates, low investments and slow execution of infrastructure projects have been impacting the domestic economy. Indian economy’s growth is likely to remain at sub-5% level in FY14.
The UN report highlighted that average economic growth in the South Asian region is projected to pick up gradually to 4.6 percent in 2014 and 5.1 percent in 2015, up from near a two-decade low at 3.9 percent in 2013. The report added that several of the region's economies, including India have been witnessing significant improvement on macro- economic front. Further, moderating inflation, improving external balances and strengthening currencies are likely to provide impetus to these regional economies in the coming time. External demand is also projected to improve in 2014-15 as economic activity in developed economies gains momentum. However, structural impediments, including energy and transport constraints, political unrest and violence will remain major concerns to growth for South Asian regional countries.
Further, the report added that global economy is expected to strengthen over the next two years, despite a downgrade of growth prospects for some developing economies. Growth of world gross product (WGP) is projected at 2.8 percent in 2014 and 3.2 percent in 2015, up from 2.2 percent in 2013. It noted that for the first time since 2011, the developed economies are all aligned towards positive economic growth over the next two years. Growth in developed economies is projected at 2 percent in 2014 and 2.4 percent in 2015.
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