NEW DELHI: India's economy will expand at the slowest pace in seven years with the World Bank, Asian Development Bank and a grouping of

developed nations expecting growth to be knocked down to 4-5 per cent in 2009-10.

There is also little chance of the global economy staging a recovery during this year, although it might be able to stand up on its feet in 2010.

In its global economic forecast update for 2009, the World Bank projected a growth rate of 4 per cent for India during 2009-10, while the Asian Development Bank (ADB), in its outlook, expects the economy to expand by 5 per cent.

A separate outlook by Organisation for Economic Cooperation and Development (OECD), a club of developed countries, has forecast 4.3 per cent growth rate for India.

India had last grown below this level in 2002-03, when the economy expanded by 3.8 per cent.

A likely recovery in global economy next year may push India's growth rate in fiscal 2010-11 to 7 per cent (WB forecast) and 6.5 per cent (ADB projection).

Before the financial crisis hit the global economy, India had been recording a growth rate of nine per cent or more. As far as 2008-09 ending today is concerned, the growth estimates vary from 5.5 to 7.1 per cent.

The ADB's forecast for 2008-09 is 7.1 per cent, with downside risks -- the same as the one estimated by the Central Statistical Organisation (CSO).

"In the large emerging economies, activities are slowing as access to international credit dries up, commodity prices fall and export demand weakens", said the Interim Economic Outlook released by the OECD.

Pointing out that the economic growth in India will ease to 4.3 per cent this year, the Outlook said that China is likely to grow by 6.3 per cent. However, the economies in Brazil and Russia are expected to decline by 0.3 and 5.6 per cent, respectively.

Noting that the current recession is deepest and most widespread in the last 50 years, it said international trade could fall by 13 per cent and world economy by 2.7 per cent during 2009. "The big emerging economies will also suffer abrupt slowdowns in growth."

As regards the global economy, the World Bank report said it could shrink by 1.7 per cent in 2009 as against the growth of 0.9 per cent estimated in November.

ADB Director (South Asia) Bruno Carrasco said, for India there is "little room for further fiscal manoeuvre," but the Reserve Bank could take monetary actions if needed.

"That (limited fiscal space for stimulus) leaves the remaining option at monetary easing if RBI feels that there is some degree of further scope of easing the policy rates without undermining inflation, strong reserves for liquidity ... RBI may wish to consider further measures," he said.

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