The UN World Economic Situation and Prospects 2014 (WESP) report said a mild recovery in investment as well as stronger export growth will help in the gradual GDP pick-up. (Agencies)
It said the Indian economy, which accounts for over 70 percent of total output in South Asia, slowed further in 2013. The growth was held back by weak household consumption and sluggish investment, the report added.
Full-year growth decelerated to 4.8 percent in 2013 from 5.1 percent in the calendar year 2012.
It said external conditions continued to be challenging as the Indian economy experienced significant capital outflows, which led to a sharp depreciation of the rupee.
"While India's slowdown may have bottomed out, the recovery is likely to be slower than previously expected. Economic activity is forecast to expand by 5.3 percent in 2014 and 5.7 percent in 2015," the report said.
It said the gradual pick-up in GDP growth is likely to be supported by good monsoon, recovery in investment and stronger export growth on the back of improved global conditions.
The report further said that global economic growth is expected to increase over the next two years with continuing signs of improvement.
The global economy is projected to grow at a pace of 3 percent in 2014 and 3.3 percent in 2015, compared to an estimated growth of 2.1 percent in 2013.
Growth in the United States strengthened somewhat. A few large emerging economies, including China and India, managed to backstop the deceleration they experienced in the past two years and veered upwards moderately. These factors point to increasing global growth," the report said.
It said the central government is unlikely to meet its target of reducing the deficit to 4.8 percent of GDP in the current fiscal year 2013/14, since growth is below projections and the depreciation of the rupee pushes up the subsidy Bill.
The UN World Economic Situation and Prospects 2014 (WESP) report said a mild recovery in investment as well as stronger export growth will help in the gradual GDP pick-up.