While the world has not recovered from the second financial crisis since 2008, Kaushik Basu, the chief economic advisor to the prime minister, anticipates another tanking of global economy in 2014.

“The world has a risk of a major crisis in 2014. If it happens, it will be a triple downturn since 2008 when the first financial crisis happened. Then in 2011, the world economy again dipped,” he said at the launching of the UN Economic and Social Survey of Asia and the Pacific 2012 (UNESCAP) in New Delhi today.

He said that the possible crisis is likely to happen because of distinct European economic crisis in 2014 because of debts worth 1.3 trillion euro comes up for repayment around December 2014 and February 2015. However, he cautioned, “We have to be aware of such risk.”

“You have to be aware of that otherwise some of these may backfire,” he told reporters. He also predicted India will play a major role in the global economic affairs in 2014.   

“The European Union is a major trading partner. The Eurozone breakup will have a great impact on us,” added Basu. “India's economy will likely grow 7.6 percent in the fiscal year 2012-13.”

However, UNESCAP forecasts that India is likely to grow at 7.5 percent in 2012. “The economy of India is expected to expand by 7.5 percent in 2012, an improvement from 6.9 percent in the previous year. There are indications that the economy is turning around as core sectors, manufacturing, show signs of recovery,” said the report.

“The UNESCAP survey is not an optimistic forecast. We are on a path of slow recovery,” said Basu.

The rating agency Standard & Poor has predicted India to grow by 6.8 percent in current fiscal year while the International Monetary Fund (IMF) has pared India’s economic growth projection to 6.9 per cent in 2012 from its January estimate of 7 per cent. Recently, Philippines based the Asian Development Bank (ADB) said the country will grow at 7 percent in 2012-13 from 6.9 percent a year ago.

The UNESCAP report also noted that widespread poverty continues to be a challenge in South Asia despite notable success in reducing it over time.