New Delhi: The Organisation for Economic Co-operation and Development (OECD), revising its forecast downwards, has projected a 5.4 per cent growth for the domestic economy in 2014 as global recovery continues at a moderate pace.

Earlier in September, the Paris-based think tank had projected a 5.7 per cent growth rate for the country's economy.

Growth will strengthen in the country as investment picks up, from a 5.4 per cent rate in 2014 to 6.4 per cent in 2015 and 6.6 per cent in 2016, according to the advanced G20 release of the OECD's latest Economic Outlook.

India could be within striking distance of China by 2016 in terms of the pace of growth, with that country forecast to slow in the years ahead, according to the OECD.

The think tank said China is rebalancing its economy while trying to achieve a controlled slowdown to more sustainable growth rates, and is projected to grow at around 7 per cent over the 2015-16 period, down slightly from 7.4 per cent in 2014.

OECD Secretary-General Angel Gurra said a number of business-friendly measures have been adopted over the past few months in the country. "Growth is strengthening in India," he said.

OECD is a grouping of 34 countries.

The country's economic growth accelerated to 5.7 per cent in the April-June quarter of the current financial year, much better than the 4.7 per cent figure in the same quarter of the 2013-14 fiscal.

The government expects growth in FY15 to be between 5.4-5.9 per cent. The economy grew by sub-5 per cent in 2012-13 and 2013-14.

The organisation said that the global economy remains stuck in low gear, but is expected to accelerate gradually if countries implement growth-supportive policies. Widening differences across countries and regions are adding to the major risks on the horizon, it added.

"We have yet to achieve a broad-based, sustained global expansion, as investment, credit and international trade remain hesitant," Gurra said while launching the Outlook in the run-up to the G20 Leaders Summit that will take place on November 15-16 in Brisbane.

Financial risks remain high and may increase market volatility in the coming period, he said adding there is an increasing risk of stagnation in the euro area. Countries must employ all monetary, fiscal and structural reform policies at their disposal to address these risks and support growth, Gurra said.

Global GDP growth is projected to reach a 3.3 per cent rate in 2014 before accelerating to 3.7 per cent in 2015 and 3.9 per cent in 2016, according to the Outlook.

This pace is modest compared with the pre-crisis period and somewhat below the long-term average. It is also slightly lower than the last OECD forecast in September.

Among the major advanced economies, it said that recovery remains robust in the US, which is projected to grow by 2.2 per cent in 2014 and around 3 per cent in 2015 and 2016. Growth in the Euro area is expected to pick up slowly, from 0.8 per cent in 2014 to 1.1 per cent in 2015 and 1.7 per cent in 2016, it added.