The International Monetary Fund (IMF) sees the Indian economy recording 5.7 per cent growth this calendar year, on the back of improved external demand and recently implemented pro-growth measures.
This forecast is lower than the 5.9 per cent GDP growth projected by IMF in January, but higher than the revised level of four per cent in 2012.
For 2014, the Indian economy is expected to record 6.2 per cent GDP growth, the IMF said in its latest World Economic Outlook (WEO) report released in Washington on Tuesday.
IMF’s forecast is not strictly comparable with the projections made by the Central Statistics Office (CSO) here, as the latter follows the April-March year, while the former follows a calendar year.
CSO has pegged the advance estimate of GDP growth for 2012-13 at five per cent, the lowest in a decade.
The IMF has cautioned that significant structural challenges will likely lower potential output over the medium term in India and also keep inflation elevated by regional standards.
Investments have stalled in India due to supply factors such as infrastructure or labour market bottlenecks and domestic policy uncertainty and regulatory obstacles.
The WEO also projected a modest improvement in global economic growth to 3.3 per cent from 3.2 per cent in 2012.
The global prospects have improved again but the road to recovery in the advanced economies will remain bumpy.
Until now, what was a two-speed recovery, strong in emerging market and developing economies but weaker in advanced economies, is now becoming a three-speed recovery, the WEO report noted.
Emerging markets and developing economies are still going strong. But in advanced economies, there appears to be a growing bifurcation between the US and Euro area, the report has said.