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World Bank projects bright Indian growth for 2016-17 amid weak global growth

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A World Bank report projects India’s growth at 7.8% in 2016-17 amid projected weak global growth at 2.95%

Washington: India, the dominant economy in the South Asian region, is projected to grow at a faster 7.8 percent in fiscal 2016-17 with growth in the region, speeding up to 7.3 percent in 2016 from 7 percent in the year just ended, a new World Bank report said on Wednesday.

Weak growth among major emerging markets with only the South Asia region, led by India, projected to be a bright spot, will weigh on global growth in 2016. But economic activity should still pick up modestly to a 2.9 percent pace, from 2.4 percent growth in 2015, as advanced economies gain speed, said the World Bank’s January 2016 Global Economic Prospects released here.

South Asia region is a net importer of oil and will benefit from lower global energy prices. At the same time, because of relatively low global integration, the region is shielded from growth fluctuations in other economies, the report said.

Simultaneous weakness in most major emerging markets is a concern for achieving the goals of poverty reduction and shared prosperity because those countries have been powerful contributors to global growth for the past decade, the bank said.

Spillovers from major emerging markets will constrain growth in developing countries and pose a threat to hard-won gains in raising people out of poverty, the report warned.

Global economic growth was less than expected in 2015, when falling commodity prices, flagging trade and capital flows, and episodes of financial volatility sapped economic activity.

Firmer growth ahead will depend on continued momentum in high income countries, the stabilization of commodity prices, and China’s gradual transition towards a more consumption and services-based growth model.

Developing economies are forecast to expand by 4.8 percent in 2016, less than expected earlier, but up from a post-crisis low of 4.3 percent in the year just ended.

Growth is projected to slow further in China, while Russia and Brazil are expected to remain in recession in 2016.

“There is greater divergence in performance among emerging economies. Compared to six months ago, the risks have increased, particularly those associated with the possibility of a disorderly slowdown in a major emerging economy,” said World Bank Group Vice President and Chief Economist Kaushik Basu.

“A combination of fiscal and central bank policies can be helpful in mitigating these risks and supporting growth.”

Although unlikely, a faster-than-expected slowdown in large emerging economies could have global repercussions, the report said.

Risks to the outlook also include financial stress around the US Federal Reserve tightening cycle and heightened geopolitical tensions, it said. (Arun Kumar, IANS) (Photo: www.odishanewsinsight.com)

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World Bank Approves $310 Million Loan for Sri Lanka to Reduce Flood Risks

Evidence suggests flood frequency will increase

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The World Bank said in a statement that the Climate Resilience Multi Phase Programmatic Approach project in the island was the first of a three-phase investment programme. Pixabay

 The World Bank has approved a $310 million loan for Sri Lanka to reduce and mitigate the flood risks in parts of the capital and improve weather forecasting as well as early warning systems across the island country, the media reported on Thursday.

The World Bank said in a statement that the Climate Resilience Multi Phase Programmatic Approach project in the island was the first of a three-phase investment programme totalling $774 million which will be implemented over eight years.

Evidence suggests flood frequency will increase and nearly 87 per cent of Sri Lankans are living in areas which are likely to experience extreme temperatures and rainfall that will impact their lives, the statement cited by Xinhua news agency said.

“This comprehensive climate resilience programme will reduce losses to people’s livelihoods and public assets while reducing shocks on the economy,” said Idah Z. Pswarayi-Riddihough, World Bank County Director for Nepal, Sri Lanka and Maldives.

World Bank, Sril Lanka, Flood
The World Bank has approved a $310 million loan for Sri Lanka to reduce and mitigate the flood risks in parts of the capital. Pixabay

“Compelling evidence has informed this long-term programme which will help the government build socially responsive infrastructure and communication systems to protect lives and assets,” she added.

The programme aligns with the government’s plans to ensure fiscal and physical resilience and reduce the vulnerability of Sri Lanka’s economy in the aftermath of the 2016 and 2017 floods.

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The new forecasting systems are expected to benefit the entire nation, including 3.5 million beneficiaries living in flood-prone areas in 25 river basins. (IANS)