India will continue to be the world’s fastest growing big economy and expand its lead on China over the next two years, the World Bank said Wednesday.
The bank expects global growth to slow this year, only to rebound next year. However, it expects India’s gross domestic product expansion to accelerate to 7.4% this calendar year, 7.8% next year and 8.0% in 2017.
Over the same three years, the multi-lateral lender predicts China’s growth to slow from 7.1% this year to 7.0% in 2016 and 6.9% the year after that.
While, India’s GDP expansion was faster than China’s during the third quarter of last calendar year and the first quarter of this year, it looks as if 2015 will be the first full calendar year India has outpaced China in decades.
Much of India’s progress on paper has more to do with a radical and controversial rejigging of how it calculates GDP, economists say.
To continue to outpace China—and improve the lives of India’s own billion-person populace—the South Asian nation needs to work harder to revamp its economy and build infrastructure, the World Bank said.
“To the extent that credible reform agendas boost investor sentiment, they will also help create a virtuous cycle of stronger investment (including foreign investment) and output growth in the short term,” the bank said in its Global Economic Prospects Report. “If, however, reforms stall, this could result in significantly lower investment and growth than projected in the baseline.”
Meanwhile the other three BRICS countries—Brazil, Russia and South Africa—do not seem to be living up to the hype from the days that acronym was created. The World Bank predicts that the Brazilian and Russian economies will both shrink this year while South Africa’s will only expand by 2%. Things will improve for the three economies in the next two years but even then, they will each only see their GDPs expand by 2.5% or less in 2017.
via India to Widen Its Growth Lead Over China, World Bank Says – India Real Time – WSJ.
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