World Bank expects India to inch closer to China in growth rate

World Bank Chief Economist Kaushik Basu says that by 2015, the growth rate of China would be 7.9% and that of India 7%


Washington: India's growth is expected to inch closer to that of China in near future, reports PTI quoting a top economist from the World Bank.


The World Bank had yesterday released its latest issue of Global Economic Prospects 2013, in which the economies of developing countries like India, China and Brazil are projected to be recovering and higher growth rate.


The World Bank expects that by 2015, the growth rate of China would be 7.9% and that of India 7%, World Bank Chief Economist Kaushik Basu told reporters during a conference call.


He added that the gap between the two Asian giants closes.


"We do expect India to inch closer to China and for a very, very good reason--not an analysis of what's happened over the last one year or two years, but a bit of a sweep of history," he said.


While the growth of the world economy growth is projected to inch up from 2.3% in 2012 to 2.4% in 2013, with the high-income countries remaining at the same level of growth of 1.3% in both 2012 and 2013, it is the emerging markets like India, China and Brazil that would show significant signs of recovery.


"Growth in Brazil had gone down quite sharply in 2012 of 0.9%. We at the World Bank are expecting Brazil to make a recovery to 3% to 4% in 2013. We are expecting recovery in the case of China from 7.9% growth in 2012 to 8.4% in 2013.


"We are expecting a recovery in India from 5.1% growth in 2012 to 6.1% growth in 2013," Basu said.


"China is growing at a phenomenal rate right from 1978 or 1980 and you can't grow at 10% for more than a couple of decades.


"China has done it for 30 years and this has been expected in China and expected by us that China will continue to grow very rapidly but it will probably come down from these great highs," Basu said.


"If it comes down to 7.9%...I think not. India was growing from 2003 to 2008 at close to 9% per annum, with the last couple of years actually over 9%, and we expect that India, having taken off only about 10 years ago, to have some still to go.


"So, there is going to be a catch-up of India's growth getting closer to China's growth and, who knows, a couple of years down that road, they may be completely neck to neck," Basu said in response to a question.


Basu said the next one or three years will remain difficult as structural reforms are put in place primarily in the euro zone countries, but even elsewhere in the world.


Sharp slowdown in India weakens growth rate of South Asia: WB

Economic growth in South Asia dropped to an estimated 5.4% in 2012 is mainly due to a sharp slowdown in India, where GDP growth is forecast at 5.4% in the fiscal year ending March 2013


Washington: Sharp slowdown in the Indian economy has weakened the growth rate of South Asia, reports PTI quoting the World Bank.


According the Global Economic Prospects 2013, released on Tuesday, economic growth in the region dropped to an estimated 5.4% in 2012 from 7.4% the previous year.


This is mainly due to a sharp slowdown in India, where GDP growth is forecast at 5.4% in the fiscal year ending March 2013, the bank said


It added that weak global demand exacerbated region specific factors, including subdued investment growth, electricity shortages, policy uncertainties, and a weak monsoon.


“Regional GDP is projected to grow by 5.7% in the 2013 calendar year, and by 6.4% and 6.7% in 2014 and 2015 respectively driven by policy reforms in India, stronger investment activity, normal agricultural production, and improvement in export demand.


Growth in India (at factor cost) is projected at 6.4% in the 2013 fiscal year, rising to 7.3% by 2015,” the report said.


According to the report, in India, the region’s largest economy, growth measured in factor cost terms is projected to decelerate to 5.4% in the 2012 fiscal year (ending in March 2013) from 6.5% in the 2011 fiscal year.


“Growth in Pakistan, the second largest economy in the region, remained broadly stable at a projected 3.8% in the 2012-13 fiscal year compared with 3.7% in 2011-12.


Bangladesh’s growth is projected to slow to 5.8% in 2012-13 (6.3% in 2011-12) and Nepal’s growth to 3.8% in 2012-13 (4.6% in 2011-12),” it said.


Sri Lanka’s GDP growth slowed to an estimated 6.1% in 2012 (8.3% in 2011).


In contrast, Afghanistan’s economy grew robustly by about 11% mostly due to a good harvest, the report said.



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