Management
discussion
and analysis
Economic overview
The world economy reached
subdued growth of 3% in 2013
against 3.1% in 2012 primarily
due to the economic volatility in
the first half of the year.
While most developed
economies continued to grapple
with the challenge of taking
appropriate fiscal and monetary
policy actions in the aftermath of
the financial crisis, a number of
emerging economies, which had
already experienced a notable
slowdown in the past two years,
encountered new domestic and
international headwinds during
the period.
In the second half of the year
however, demand in advanced
economies improved primarily
due to inventory restocking. In
emerging market economies, an
export rebound strengthened
the improved performance even
as domestic demand remained
subdued – providing momentum
to the global GDP. India’s
economic growth in 2013-14
was estimated at 4.9%, faster
than in the previous year mainly
following improved performance
in the agriculture and allied
sectors.
The IMF indicates that emerging
markets will account for much
of global growth, with their
economies forecast to expand
nearly four times faster over
advanced economies. As far
as advanced economies are
concerned, the US is expected
to emerge as the key growth
driver. The Eurozone is turning
the corner after recovering from
recession and is expected to
post positive economic growth
in 2014. The result is that global
growth is projected slightly
higher (around 3.7%) in 2014,
rising to 3.9% in 2015 (
Source:
IMF
). According to NCAER,
India’s economic growth is likely
to rebound to 5.6% while Asian
Development Bank has projected
India’s GDP growth at 5.5% for
2014-15 depending on its ability
to implement structural reforms.
Global GDP Growth (%)
(Quarter over quarter, annualised)
8
7
6
5
4
3
2
1
0
-1
-2
2011
Source: IMF staff estimates
2012
2013
2014
GDP Growth (%)
Source: Central Statistics Office
9.6
9.3
6.7
8.6
8.9
6.7
4.5
4.9
Global economic progression
India’s economic growth
World
Advanced economies
Emerging market and developing economies
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
15
Annual Report 2013-14
