Indian economy's slowdown may have bottomed out but the pace of recovery will likely be slower than previously expected, a newly published United Nations (UN) report predicted.

In its World Economic Situation & Prospects 2014 report, the US said while a mild recovery in investments and stronger growth of exports would help in the gradual pick up in the country's gross domestic product (GDP) this year, the growth would likely be lower-than-expected 5.3 per cent.

In the following year, India's GDP is projected to grow at a rate of 5.7 per cent.

The WESP 2014 report said, "While India's slowdown may have bottomed out, the recovery is likely to be slower than previously expected. Economic activity is forecast to expand by 5.3 percent in 2014 and 5.7 percent in 2015."

It cautioned that the Indian economy would continue to face challenging external conditions as the country experienced massive capital outflows, which caused a sharp depreciation of the rupee.

Last year, India's GDP growth was held back by sluggish investment and weak household consumption. India is the third-largest economy of Asia, accounting for more than 70 per cent of total output in South Asia region. Its full-year growth slipped to 4.8 per cent in 2013/14, from 5.1 per cent in the previous financial year.

World economy is projected to grow at a rate of 3 per cent in FY2014/15 and 3.3 per cent in FY2015/16. In 2013, the world economy could grow just 2.1 per cent from the previous year.