India will catch up with China’s growth at 7 percent in the year 2016-17, the World Bank has forecast, saying India’s economy has recovered in the wake of the economic reform measures taken by the new Indian government, falling oil prices and lower interest rates.
“India will catch up with China’s growth in the year 2016 and 2017,” World Bank Chief Economist and Senior Vice-President Kaushik Basu said.
“China’s growth will remain high, but will begin to taper very gently, reaching 6.9 percent in 2017,” he said as the world Bank released the ‘Global Outlook: Disappointments, Divergences, and Expectations Global Economic Prospects’.
The World Bank in its report forecast a growth rate of 7 per cent each in the fiscal year 2016 and 2017 as against China’s 7 per cent and 6.9 per cent respectively.
This would be for the first time in recent past that India’s growth rate would catch up with that of China.
The World Bank estimated a growth rate of 5.6 percent in 2014 and has forecast a growth rate of 6.4 percent in 2015, while that of world’s second largest economy China as 7.4 (estimated) in 2014 and 7.1 percent (forecast) in 2015.
In its report, the bank said growth in South Asia rose to an estimated 5.5 percent in 2014 from a 10-year low of 4.9 percent in 2013.
“The upturn was driven by India, the region’s largest economy, which emerged from two years of modest growth,” it said.
Regional growth is projected to rise to 6.8 percent by 2017, as reforms ease supply constraints in India, political tensions subside in Pakistan, remittances remain robust in Bangladesh and Nepal, and demand for the region’s exports firms, it said.
“Past adjustments have reduced vulnerability to financial market volatility. Risks are mainly domestic and of a political nature. Sustaining the pace of reform and maintaining political stability are key to maintaining the recent growth momentum,” the report said.
