Washington, Jan 23 (IANS) Picking up from the current downslide, India's growth is projected to rise from 4.5 percent in 2012 to 5.9 percent in 2013 and reach 6.4 percent in 2014, according to the International Monetary Fund (IMF).
Even as it lowered India's growth rate by a minuscule 0.1 percentage point for 2013 from its October projection, IMF in an update to its World Economic Outlook (WEO) released Wednesday left the 2014 figure unchanged.
As the constraints on economic activity start to ease this year, global growth will strengthen gradually to 3.5 percent this year, from 3.2 percent in 2012 - a downward revision of just 0.1 percentage point compared with the October 2012 WEO.
But the recovery is slow, and the report stressed that policies must address downside risks to bolster growth.
Growth in emerging market and developing economies is on track to build to 5.5 percent in 2013, it said. Nevertheless, growth is not projected to rebound to the high rates recorded in 2010-11.
Supportive policies have underpinned much of the recent acceleration in activity in many economies, the IMF said.
But weakness in advanced economies will weigh on external demand, as well as on the terms of trade of commodity exporters, given the assumption of lower commodity prices in 2013 in the January Update, it said.
Moreover, "the space for further policy easing has diminished, while supply bottlenecks and policy uncertainty have hampered growth in some economies", it said citing the example of Brazil and India.
The report observed that economic conditions improved slightly in the third quarter of 2012, driven by performance in emerging market economies and the US.
The IMF forecast a growth of 2 percent in the US this year, broadly unchanged from the October 2012 WEO.
A supportive financial market environment and the turnaround in the housing market will support consumption growth, it said.
For the US, the IMF stressed that "the priority is to avoid excessive fiscal consolidation in the short term, promptly raise the debt ceiling, and agree on a credible medium-term fiscal consolidation plan, focused on entitlement and tax reform".
For emerging market and developing economies, the report underscored the need to rebuild policy room for manoeuvre.
It noted that "the appropriate pace of rebuilding must balance external downside risks against risks of rising domestic imbalances".
(Arun Kumar can be contacted at firstname.lastname@example.org)