India's Economic Growth Likely To Outpace China Predict IMF and World Bank

India's economic growth clip this year and next will be better than previously assumed, overtaking China in 2015 to become the world's fastest growing major economy and widening the gap further in 2016, the International Monetary Fund (IMF) and the World Bank have said in separate forecasts. Both the IMF and World Bank see India's growth rising to 7.5 per cent in 2015 from 7.2 per cent in the preceding year, but have different assessments for 2016. The IMF, which last January forecast 2015 growth at 6.3 per cent and 2016 growth at 6.5 per cent, has pencilled in 7.5 per cent growth next year while World Bank has the 2016 figure higher at 7.9 per cent. The bank had last January pegged the growth rates at 6.4 per cent this year and 7 per cent in 2016. The Centre had budgeted 8.1-8.5 per cent GDP growth in the year to end-March 2016. These estimates were released on Tuesday ahead of the IMF-World Bank spring meetings in Washington. Finance Minister Arun Jaitley is leading the Indian delegation, which includes RBI Governor Raghuram Rajan, to the meetings. The latest numbers, which are a significant upgrade on earlier assessments, take into account the much-debated and questioned new national accounts numbers of the Central Statistics Office (CSO) as also reforms by the Narendra Modi Government. IMF has pegged China's growth at 6.8 per cent in 2015 and 6.3 per cent next year while the world economy is forecast to show no material improvement, growing only 3.5 per cent compared with 3.4 per cent in 2014. World Bank sees China growing at 7 per cent in the next two years. "India's growth is expected to strengthen from 7.2 per cent last year to 7.5 per cent this year and next. Growth will benefit from recent policy reforms, a consequent pickup in investment, and lower oil prices," IMF's World Economic Outlook said. The strong growth in India has already made South Asia the fastest growing region in the world, World Bank noted. India's expected growth acceleration, World Bank noted in its twice yearly South Asia Economic Focus report, is being "driven by business-oriented reforms and improved investor sentiment" and that growth could reach 8 per cent in fiscal year 2017-18 on the back of significant acceleration in investment growth. "(India) is attempting to shift from consumption to investment led growth at a time when China is undergoing the opposite transition," it noted.



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