The World Bank in its Global Economic Prospects Report released on 15 January 2014 forecasted that economy of India will grow by just 6 percent in 2014-15. In its forecast, the World Bank has also said that the economic growth of India will improve to 6.6 percent in 2015-16 and 7.1 percent in 2016-17. The economic growth will be followed by the recovery in global demand and increase in domestic investment.
The report released by the World Bank also says that the global GDP growth in 2014 will be 3.2 percent from 2.4 percent in 2013. It also said that the global GDP will stabilise at 3.4 percent and 3.5 percent in 2015 and 2016 respectively.
The report also mentions that the global economy is projected to strengthen with growth and will pick up in developing nations. The high-income economies will finally come-out from the global financial crisis that has lasted for five years. The report has also estimated that the growth of China will remain flat at 7.7 percent in 2014 and will slow to 7.5 percent for 2015 and 2016.
Growth prospects for 2014 are, however, sensitive to the tapering of monetary stimulus in the United States, which began earlier in January and to the structural shifts taking place in China’s economy.
Background: The global economy has seen dramatic changes in private capital inflows in the developing countries in past two decades. These capital inflows have increased the substantially in absolute terms as a share of developing countries GDP. This is characterized by large fluctuations in response to changing global financial and economic conditions.
Financial inflows averaged around 6 percent of the GDPs of the developing countries in the post-crisis period. It was supported by low interest rates in high-income countries and stronger growth prospects across the emerging and developing region.
About Global Economic Prospects of World Bank
The World Bank's twice-yearly Global Economic Prospects examines growth trends for the global economy and how they affect developing countries. The reports include three-year forecasts for the global economy and long-term global scenarios, which look ten years into the future. The publication covers financial markets, trade, commodities and inflation.
About World Bank
Established in 1944, the World Bank Group is headquartered in Washington, DC. It has more than 10000 employees in more than 120 offices worldwide. The World Bank Group has set two goals for the world to achieve by 2030:
• End extreme poverty by decreasing the percentage of people living on less than 1.25 dollar a day to no more than 3 percent
• Promote shared prosperity by fostering the income growth of the bottom 40% for every country
The World Bank is a vital source of financial and technical assistance to developing countries around the world. It is not an ordinary bank but it has unique partnership to reduce poverty and support development. The World Bank Group comprises five institutions managed by their member countries.
Five institutions together make up the World Bank Group
IBRD: The International Bank for Reconstruction and Development (IBRD) that lends to governments of middle-income and creditworthy low-income countries.
IDA: The International Development Association (IDA) that provides interest-free loans—called credits— and grants to governments of the poorest countries.
IFC: The International Finance Corporation (IFC), is a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments.
MIGA: The Multilateral Investment Guarantee Agency (MIGA) that was created in 1988 as a member of the World Bank Group to promote foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance (guarantees) to investors and lenders.
ICSID: The International Centre for Settlement of Investment Disputes (ICSID) that provides international facilities for conciliation and arbitration of investment disputes.