New Delhi: World Bank on April 2 warned that a prolonged war in Iraq may adversely affect India's gross domestic product (GDP) growth prospects in this fiscal.

"India's GDP growth depends on the outcome of the war. If war continues for a long time and oil prices continue to rise, it could affect the country," William Shaw, lead economist of World Bank's international finance team, told reporters after launching the "Global Development Finance 2003" report.

Although the Bank did not like to make any forecast linking the war right now, Shaw said oil prices were extremely volatile due to the war on Iraq.

Since India is a net importer of oil, it could affect the country, he added.

Commenting on the Global Development Finance report, he said, "War has added more bumps to an uneven global expansion."

This was mainly due to higher oil prices, falling consumer and business confidence, increased volatility in financial markets and higher fiscal deficits, he said.

Moreover, he said war may have an impact on remittances flow as well.

Otherwise, World Bank projected an average 5.3 per cent economic growth for India and other South Asian nations during 2003, which is marginally lower than 5.4 per cent projected in December 2002.

As per the World Bank's projected growth figures, South Asia is well ahead of the average growth of all developing nations slated to grow at 4.0 per cent and global average of 1.8 per cent during 2003.

The Bank also said foreign direct investments (FDI) and remittances outpaced debt as a source of financing developed nations.

PTI