World Bank forecasts India’s economy to grow at 5.7% in FY15

In yet another development which would add to the cheer of policymakers battling to restore faltering growth in Asia's third-largest economy, the World Bank on Wednesday projected an economic growth rate of 5.7 percent in fiscal year 2015 for India on the back of a more competitive exchange rate and many large investments going forward.  This development comes a day after multilateral agency International Monetary Fund (IMF) projected India's economy to grow by 5.4% in 2014-15 and 6.4% in 2015-16 on the back of strengthening global growth, improving export competitiveness and implementation of recently approved investment projects. World Bank in its latest edition of 'South Asia Economic Focus, bolstered by permanently more competitive exchange rate and progress towards clearance of important investment projects, forecasted India to see an acceleration of growth (factor costs) to 5.7 percent in FY 2015 from 4.8 percent in FY 2014. The Indian rupee, which plunged to all-time low of 68.85 in August last year, has since then recovered substantially to trade sub 60-levels against the US dollar. However, it pointed that country faces significant amount of threat from its banking sector growing exposure to company debt, which could ultimately affect the government's finances through its ownership and the need to prop up distressed but systemically important banks. Nonetheless, it underscored that South Asian countries - Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka - have all largely recovered from last year's financial turmoil caused by changes in US Federal Reserve monetary policy. Besides, World Bank in twice-a-year ‘South Asia Economic Focus’, forecasted that economic growth in the region would rise to 5.8 per cent in 2015 from 5.2 per cent this year and 4.8 percent last year