Global GDP growth is projected to firm from 2.4 percent in 2013 to 3.2 percent this year, stabilizing at 3.4 percent and 3.5 percent in 2015 and 2016
The world economy is projected to strengthen this year, with growth picking up in developing countries and high-income economies appearing to be finally turning the corner five years after the global financial crisis, says the World Bank's newly-released Global Economic Prospects (GEP) report.The firming of growth in developing countries is being bolstered by acceleration in high-income countries and continued strong growth in China. However, growth prospects remain vulnerable to headwinds from rising global interest rates and potential volatility in capital flows, as the United States Federal Reserve Bank begins withdrawing its massive monetary stimulus.
Global GDP growth is projected to firm from 2.4 percent in 2013 to 3.2 percent this year, stabilizing at 3.4 percent and 3.5 percent in 2015 and 2016, respectively, with much of the initial acceleration reflecting stronger growth in high-income economies. Growth in developing countries will pick up from 4.8 percent in 2013 to a slower than previously expected 5.3 percent this year, 5.5 percent in 2015 and 5.7 percent in 2016.
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. More recently, regional exports have recovered, because of strengthening external demand and the earlier depreciation of the Indian rupee. Regional growth is projected to improve to 5.7 percent in 2014, rising to 6.7 percent in 2016, led mainly by recovering import demand by high-income economies and regional investment. The projected pickup, however, will depend on macroeconomic stability, sustained policy reforms, and progress in reducing supply side constraints. India's growth is projected to rise to over 6 percent in FY2014-15, increasing to 7.1 percent by FY2016-17. The main risks to the outlook are fiscal and policy reforms going off-track; uncertainties related to elections in Afghanistan, Bangladesh and India; entrenchment of inflation expectations; and a disorderly adjustment of capital flows in response to US tapering.
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