World Bank projects 5.7% growth for India in 2014-15

PTI | Apr 9, 2014, 11.07PM IST

WASHINGTON: The World Bank on Wednesday projected an economic growth rate of 5.7 per cent in 2014-15 for India on the back of a more competitive exchange rate and many large investments going forward.

"Bolstered by permanently more competitive exchange rate and progress towards clearance of important investment projects, India may see an acceleration of growth (factor costs) in FY 2014 to 4.8 per cent, further increase to 5.7 per cent in FY 2015," the World Bank said in its latest edition of 'South Asia Economic Focus'.

Another multilateral agency IMF had on Tuesday forecast that Indian economy would recover from 4.4 per cent growth in 2013 to 5.4 per cent in 2014. The estimate triggered a rally on Indian bourses, with BSE benchmark sensex surging close to 360 points to all-time closing high of 22,702.34.


The Indian rupee, which plunged to all-time low of 68.85 in August last year, has since then recovered to trade in 60-levels against the US dollar. The International Monetary Fund (IMF) had also cited export competitiveness as a reason for possible growth recovery.

The World Bank report said in India the problem is the banking sector's growing exposure to company debt. The fear is that this could ultimately affect the government's finances through its ownership of state banks and the need to prop up distressed but systemically important banks, it added.

In its twice-a-year 'South Asia Economic Focus', the World Bank forecast 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.

South Asian countries — Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka — appeared to have largely recovered from last year's financial turmoil caused by changes in US Federal Reserve monetary policy.

Many were rebuilding currency reserves while curbing current account deficits, it said.

But these successes on the external side were accompanied by looming problems in the domestic economy. Economic growth could be held back by unstable banking sectors, inflation, fiscal deficits and debt, and persistent shortfalls in energy and transport infrastructure across the region, it said.

India to be a global powerhouse for investments and savings by 2030: World Bank

TOI :Partha Sinha, TNN | Jun 4, 2013, 06.53AM IST

MUMBAI: Across much of the developing world, robust growth over the next 17 years will be associated with high investment rates. 

As a result, by 2030, the combined share of China and India in world's total investments would be about 38%, compared to the combined share of all the high-income countries, including US, a report by the World Bank pointed out. 

"Under the gradual convergence scenario, Brazil, India and Russia, together, will account for more than 13% of global investment in 2030, more than the United States," WB's report, titled Capital for the Future: 

Saving and Investment in an Interdependent World, noted. The report said that in future, the patterns of investment will involve not only geographic shifts but also sectoral ones, mainly showing a marked tilt towards services. 

"As countries become richer, demand shifts toward services....In the gradual convergence scenario, services as a share of total investment in developing countries will grow from 57% to 61%," the report said. This shift will lead to increased demand for education, healthcare and infrastructure, and also a global drift "toward greater trade in services and a larger share of services being embedded in tradable goods," it pointed out. 

WB estimates that by 2039, India will reach its maximum ratio of working to non-working age population with 2.2 working person for every non-working one. 

"But already by the mid-2020, when most of the other developing countries will experience less favorable demographic trends, 

India will be one of the economies with the highest ratios of working to non-working population," it said. 

This, jointly with its large population and growing incomes, are the key explanations of why India will become a powerhouse in global savings and investment, the report noted.

World Bank to provide 3-5 US bn funding to India

 PTI :New Delhi:13 April 2013

 World Bank today committed annual funding of $3-5 billion to India for next four years to push development projects and poverty eradication programmes.

“The World Bank Group would work towards continuing its level of annual assistance of $3 to $5 billion to India over the next four years,” president of multi-lateral funding agency Jim Yong Kim told reporters in New Delhi.

India’s dirty rivers. AFP

During the year ended June 2012, the World Bank Group gave loan of $3.2 billion for various projects including National Mission Clean Ganga.

Kim, who was on a three-day visit to India for the first time after taking over as the president last year, said the Bank will complement its enhanced financial lending with technical assistance and knowledge services to help India improve the implementation of its development programmes.

On whether World Bank is contemplating to close International Development Association (IDA), soft loans window, for India as it has become a middle-income country, he said: “We are in middle of discussions right now about our IDA strategy…we are going to be as creative as possible tomaintain our commitment to India at very high levels.”

The bank is concerned about the poor, and about 400 million people live in India, Kim said.

“We hope, especially working through IFC, $3-5 billion can leverage many more billions for investment in India. We believe that India is a good investment and we will deepen our engagement as much as we can, using every bit of flexibility and creativity to get there,” he said.

Kim said India has higher potential of growth than 6 per cent projected for the next fiscal. “We have seen signs of the economy having bottomed out. Six per cent is not a spectacular growth. India has many things going. The challenge is how to go back to the potential.”

On the ease of doing business, Kim said it is mostly a procedural issue and it can be tackled.

PTI

Finance Minister Meeting World Bank President

Finance Minister During his Meeting with the World Bank President

by Ministry of Finance, Government of India on Tuesday, March 12, 2013 at 11:14am ·

In view of the huge investment requirements in the infrastructure, social and rural development sectors in India, the Union Finance Minister Shri P. Chidambaram highlighted the need for continued and enhanced engagement of the World Bank Group with India. The Finance Minister Shri Chidambaram further emphasized the need for enhancing the capital base of the bank to meet the challenges of poverty reduction and infrastructure development in the developing countries. The Finance Minister Shri Chidambaram was speaking after Dr. Jim Yong Kim, President, World Bank Group called on him in his office here today.

Beside above, several issues concerning India’s engagement with the World Bank Group were also discussed during the delegation level meeting between the two leaders. During the meeting, issues related to global economy and its impact on Indian economy were discussed. The Finance Minister Shri Chidambaram informed the World Bank President about the challenges faced by the Indian economy at present and reforms undertaken by the Government in the recent past. It is pertinent to mention here that India is the highest cumulative borrower of World Bank of US$ 90.5 billion; with a current portfolio of 77 projects having a commitment of US$ 23.3 billion

Speaking on the occasion, Dr. Jim Yong Kim, President, World Bank informed the Finance Minister about the World Bank Group’s new agenda on global poverty reduction and shared prosperity. Dr Kim assured adequate support to India in meeting the developmental challenges being faced by the country. Minister Chidambaram and Dr. Kim discussed on options for increasing external finance for infrastructure as well as for other development needs of India.

Dr. Jim Yong Kim, President World Bank Group is on a three day visit to India from 11-13 March, 2013. This is his first visit to India in his capacity as the President, World Bank Group. Dr. Kim would also be visiting Uttar Pradesh on 12th March in order to have the understanding of the ground realities and developmental challenges faced by the State. He would also be meeting the Chief Minister of Uttar Pradesh there and would be visiting the rural side to get a glimpse of rural sector challenges and Kanpur to get a glimpse of urban sector challenges in India.

World Bank Group Announces Bertrand Badré as Managing Director for Finance and CFO

World Bank :December 18, 2012

WASHINGTON, December 18, 2012—World Bank Group President Jim Yong Kimtoday announced the appointment of Bertrand Badré as Managing Director for Finance and Chief Financial Officer. Badré, a French national, is currently serving as the Group Chief Financial Officer at Société Générale.

“Bertrand has deep management experience in some of the largest financial institutions in Europe, and he has a strong track record and sterling reputation,” said Kim. “I am very pleased to have Bertrand join the Bank’s management team, where I am confident he will continue to protect the Bank’s financial strength and maintain our ongoing commitment to effectively safeguard the resources entrusted to us. I also believe he will bring innovative solutions to the fiscal challenges in the developing world.”

Prior to joining Société Générale, Badré served as the Chief Financial Officer of Crédit Agricole SA from July 2007 to July 2011. He has also been Managing Director of Lazard and an advisor to President Chirac.

As World Bank Group Managing Director for Finance and CFO, Badré will be responsible for all critical internal financial functions and the General Services Department. This includes the Bank’s finance operations (corporate finance and treasury), control functions (risk and controller), and global partnerships and concessional finance.

Badré began his career in 1989 as Assistant Group Controller for BFI-Ibexsa, a Franco-American company that distributed professional electronic components now part of Avnet. From 1995 to 1999, in the Ministry of Finance he was charged with several control, audit and consultancy missions for the French National Audit Office. In that capacity he was seconded to the World Bank in Togo in 1997.

Badré later joined Lazard in London as Assistant Director in the Corporate Finance Division, and then went up the ranks becoming Vice President and later Director in Lazard’s New York office.  From 2004 to July 2007, he served as Partner and Managing Director of Lazard in Paris.

In 2002 he was a member of the global panel on “Financing Water for All” chaired by Michel Camdessus. He later worked with Camdessus as President Chirac’s deputy personal representative for Africa for the G8. He was then spokesman for President Chirac’s working group on new international financial contributions (the Landau report).

Badré has also served as a Director on a number of boards, including the Supervisory Board of Eurazeo between 2010 and 2012, Haulotte Group since 2005, various boards of the leading French regional daily Newspaper Group Ouest France,and represented Crédit Agricole and Sociéte Générale on the board of a number of their subsidiaries.

Badré is a graduate of HEC business school and of Institut d’Etudes Politiques de Paris. He is a former student of ENA and also holds a Master’s degree in History from La Sorbonne.

The appointment will be effective March 1, 2013.

World Bank: East Asia growth strong, faces risks

Source :Written by Associated Press :Monday, 18 October 2010 17:15
Business News AP BEIJING (AP)
The World Bank raised its growth forecast for East Asia's developing countries Tuesday but said governments need to control rising risks from surging capital inflows and currency strains.


Output has rebounded to above pre-crisis levels and regional growth should hit 8.9 percent this year, up from a previous forecast of 8.7 percent, the bank said. Last year's expansion was 7.3 percent.

"The economic recovery in East Asia and the Pacific is robust, but attention must now turn to managing emerging risks which may pose challenges to macroeconomic stability," the bank said in a twice-a-year outlook for the region's economies, excluding Japan.

Asia's rebound has attracted an influx of capital that is pushing up the value of some currencies, which might hurt exports. Some governments have intervened in foreign exchange markets to slow the rise of their currencies, raising fears of a potential "currency war" that might disrupt trade and growth.

The World Bank called for the region's governments to work out a common approach.

"So far, export growth has remained robust, but with continued real appreciation of East Asian currencies this growth could slow," the bank said.

Prospects for China "look bright" but Beijing must push ahead the rebalancing of its economy away from exports and investment to sustain its expansion, the bank said. It said China's economy is expected to grow by 9.5 percent this year.

"Rebalancing the economy by altering the pattern of growth and investment is becoming increasingly critical to ensure sustainability - structurally, socially, and globally," the report said.

The report also covers Indonesia, Malaysia, the Philippines, Thailand, Cambodia, Laos, Mongolia, Myanmar, Brunei Papua New Guinea, Timor Leste, Vietnam, Hong Kong, South Korea, Singapore, Taiwan, the Solomon Islands and smaller Pacific island nations.

Regional economies need to cope with sharp price rises and possible strains to their financial systems from the influx of capital, the World Bank said.


Inflation is being driven by a rise in the cost of food and industrial materials, the report said. Price rises in China and Indonesia have exceeded targets and Thailand is warning of a similar danger there.

Rice prices were up 10 percent in August over a year ago due to poor harvests in Russia and supply disruptions in China and Pakistan, the bank said. Vegetable prices in Thailand were up 38 percent in July from a year earlier because of drought.


The dramatic rise in the flow of money into Asian banks might be passed through to borrowers, raising the threat of an increase in nonperforming loans and harm to banking systems, the World Bank said.