OECD revises upward the Indian economic growth forecast to 5.7%

The Paris-based think tank, Organisation for Economic Cooperation and Development (OECD), sharply revising upwards its forecast has projected 5.7 percent growth for the Indian economy 2014, much higher than its 4.9 percent growth projection in May this year.

In its latest interim Economic Assessment report, OECD said a moderate expansion is under way in most major advanced and emerging economies. However, it cut its economic growth forecasts for the US and other large developed economies, and said the continued weakness of the recovery demonstrated the need for significant changes in economic policy. The OECD said monetary policies in the major economies are set to diverge, with the US Federal Reserve and the Bank of England ending their easing policies at a time when the European Central Bank may have to provide even more stimulus.

Regarding India, in May this year, the organization had said that growth is expected to gather momentum. Investment should recover as projects cleared by the Cabinet Committee on Investment are implemented and political uncertainty declines after the May 2014 general elections. Now in a partial update to its twice-yearly forecasts for economic growth, the OECD said that India will grow by 5.7 per cent in 2014 and 5.9 per cent in 2015, while China is expected to grow by 7.4 per cent in 2014 and 7.3 per cent in 2015.