Adding pressure over the already deteriorating macro-economic indicators of the country, the United Nations' World Economic Situation and Prospects 2014 report has lowered the India's economic growth forecast for 2013 to 4.8 percent from 6.1 percent projected earlier. UN’s report has also lowered the growth forecast for 2014 to 5.3 per cent from 6.5 percent earlier and project 5.7 percent economic growth by 2015. Meanwhile, India's economic growth in the first half of 2013-14 stood at 4.6 percent.
Further, UN World Economic report highlighted that emerging markets should be well prepared to deal with the impact of US Federal Reserve's quantitative easing programme. The US Federal Reserve on December 19 announced that it would reduce the monthly bond purchases by $10 billion each month from the existing level of $85 billion from January.
Referring to world economy’s growth, UN noted that the potential for substantial downside risks of the premature tapering of quantitative easing could impact global growth. The world's economic weakness has stemmed from developed economies including the euro area and the US, which continue to struggle. Declining capital inflows to many developing countries and increasing volatility in flow particularly owing to the US Fed taper programme have started putting pressure on global growth. The UN report said the global economy is expected to grow at a pace of 3 percent in 2014. China's economic growth is expected to maintain a pace of about 7.5 percent over the next few years.
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