In China, growth is estimated to stay flat in 2014 at 7.7 per cent, slowing to 7.5 per cent for the next two years, reflecting deleveraging and less reliance on policy-induced investment. Global GDP growth may firm up to 3.2 per cent this year from 2.4 per cent in 2013, stabilising at 3.4 per cent and 3.5 per cent in 2015 and 2016, respectively, the World Bank said in its Global Economic Prospects (GEP) report released today.
According to the report, the global 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.
"Growth appears to be strengthening in both high-income and developing countries, but downside risks continue to threaten the global economic recovery," said World Bank Group President Jim Yong Kim.
"The performance of advanced economies is gaining momentum and this should support stronger growth in developing countries in the months ahead. Still, to accelerate poverty reduction, developing nations will need to adopt structural reforms that promote job creation, strengthen financial systems and shore up social safety nets," he said.
According to the report, in South Asia, weaker growth in India, following several years of rising inflation and current account deficits, has opened up a large negative output gap, which is projected to gradually close as the economy slowly recovers.
Better Indian performance will be heavily reflected in the region's growth, which is expected to strengthen to 5.7 per cent in 2014 and about 6.7 per cent in 2016, it said.
Growth in South Asia is estimated to have been a very weak 4.6 per cent in 2013, mainly reflecting weakness in India. Growth appeared to be recovering toward the end of 2013, and regional GDP on a calendar-year basis is projected to slowly accelerate to about 6.7 per cent in 2016, mainly reflecting stronger growth in India and a cyclical recovery in investment and external demand, it said.