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a cyclical recovery in investment and external demand, it said.
"India's growth is projected to rise to just over 6 per cent in FY2014-15 and to increase to 6.6 per cent in FY2015-16 and 7.1 per cent in FY2016-17," the World Bank said. "Growth in India will be led by recovery in global demand and an increase in domestic investment, subject to downside risks."
Pakistan's growth is expected to moderate slightly to 3.4 per cent in FY2013-14, reflecting necessary fiscal tightening, and then rise to 4.5 per cent in the medium term, it said.
Kaushik Basu, Chief Economist and Senior Vice President at the World Bank, said the global economic indicators show improvement. But one does not have to be especially astute to see there are dangers that lurk beneath the surface, he said, adding that the euro area is out of recession but per capita incomes are still declining in several countries.
"We expect developing country growth to rise above 5 per cent in 2014, with some countries doing considerably better, with Angola at 8 per cent, China 7.7 per cent and India at 6.2 per cent. But it is important to avoid policy stasis so that the green shoots don't turn into brown stubble," Basu said.
According to the report, growth in remittances to South Asia is estimated to have moderated to 6.8 per cent in 2013 from 9.7 per cent in the previous year.
"Flows to India dipped in the first quarter, but with the depreciation of the rupee, they rebounded to reach an estimated USD 71 billion in 2013," it said.
India, with large current account and fiscal deficits and weaker growth, was hit particularly hard by a withdrawal of portfolio capital (resulting in steep currency depreciation) in the middle of the year, stemming from apprehensions of tapering of US quantitative easing, the Bank said.