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The International Monetary Fund (IMF) on Tuesday became the latest organisation to predict that India is on track to outpace China in the next few years and become the world’s fastest growing large economy.
In its latest update to its World Economic Outlook (WEO) report, the IMF said India is likely to grow 6.5 per cent in 2016-17, higher than 6.3 per cent for China.
Reform pushThis prediction comes a week after the World Bank said that India is expected to outpace China in 2017-18 with growth of 7 per cent (as against China’s 6.9 per cent) on the back of reform initiatives of the Modi-led Government.
However, in the latest update, IMF lowered India’s growth projection for 2015-16 to 6.3 per cent, from 6.4 per cent estimated in October 2014.
China impactThe slowdown in China could drag the growth rates of most emerging Asian countries other than India, said the IMF report.
India’s growth will not slide with others as it is expected to reap huge net gains from the fall in global oil and commodity prices, according to the IMF report.
In India, the growth forecast is broadly unchanged, however, as weaker external demand is offset by the boost to the terms of trade from lower oil prices and a pick up in industrial and investment activity after policy reforms, the IMF report added.
World growth to slowThe latest IMF report also said world growth for 2015 and 2016 is projected at 3.5 per cent and 3.7 per cent, respectively, a downward revision of 0.3 per cent as against the October 2014 forecast.
China’s economy slowed down to 7.4 per cent in 2014 – the slowest in 24 years – missing the official target of 7.5 per cent. The IMF has now projected that China’s growth rate will decline to 6.8 per cent in 2015-16 and 6.3 per cent in 2016.
Billionaire wealthThe concentration of billionaire wealth in India is unusually large, said a World Bank report on inequality in South Asia.
This report — released on Tuesday — showed that the ratio of billionaire wealth to gross domestic product (GDP) in India was 12 per cent in 2012, higher than other economies with a similar development level. In the case of China, this ratio was 5 per cent.
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