The Organization for Economic Cooperation and Development (OECD) in its twice-yearly Economic Outlook has again slashed its growth forecast for India to 5.3% in 2013, as against its earlier forecast of 5.9%. OECD also forecast the world economy to grow 3.1% this year before accelerating to 4% in 2014. This time the Paris-based think tank took a slightly more pessimistic view after in November it forecast global growth of 3.4% this year and 4.2% next year.
As per the organization, key emerging market economies growth will remain strongest in China and India where there is still room for improvement through policy stimulus, if growth were to falter. However, warned that growth in India and Brazil will remain tepid unless government structural hindrances are taken care of.
Further, the outlook differed widely within the 17-nation bloc, where the euro zone is estimated to remain in recession for a second year and growth contracting 0.6% in 2013 and then returning to growth next year with a growth rate of 1.1%. On the other hand, Germany is seen achieving growth of 0.4% and bouncing back to a rate of 1.9% in 2014.
However, as per the report, Japan is set to grow by 1.6% this year aided by the central bank's pledge to ramp up its monetary stimulus aggressively to boost its stagnant economy; United States too will rebound and expand 1.9% this year and then accelerating to 2.8% in 2014.
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