The World Bank on Monday warned that developing economies would have shrunk if it were not for India and China. The developing nations are projected to grow 1.2 per cent this year and without China and India, these economies would have contracted 1.6 per cent in 2009.

Meanwhile, the World Bank forecast India’s economy to expand by 5.1 per cent this fiscal, the slowest in six years, although the country has consistently outperformed the multilateral funder’s estimates in the past. The Indian economy had grown by 6.7 per cent in 2008-09 against the World Bank’s estimate of 6.1 per cent, despite recession setting in most of the developed nations.

“Almost two years after problems in the US mortgage market set in motion the biggest financial crisis since the Great Depression, global financial markets remain unsettled, and prospects for capital flows to the developing world are dim,” the Bank said in its report – ‘Global Development Finance: Charting a Global Recovery’.