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India, China to lead global economy in 2013: Report

Last Updated: Thursday, January 24, 2013 - 09:24

Zeebiz Bureau

New York: With the global economy and the outlook reeling under the eurozone debt crisis and the high unemployment in the United State, emerging economies such as India and China will lead the growth in 2013, says a report.

After the United States and eurozone, India and China are seen as economies that will lead the world in the future.

According to Grant Thorton’s quarterly International Business Report, growth rates in and around Europe look weak over the next 12 months with the eurozone growing a mere 0.2 percent while the United Kingdom is likely to expand by 1.1 percent.

The report also said the economic growth in the United States remains weak with its high unemployment rates. On the contrary, China’s growth is expected to expand to 8.2 percent in 2013 from 7.8 percent while India is expected to expand to 6.0 percent, said the report.

Brazil is expected to grow 4.0 percent, the report added.

Business optimism in Brazil, Russia, India and China, also known as BRIC countries, increased in the fourth quarter of last year.

The survey of 3,200 business leaders in 44 countries found that optimism in the BRIC economies, all deemed to be at a similar stage of newly advanced economic development, has increased to 39 percent in the last quarter of 2012 compared with 34 percent one year earlier.

Emerging markets in Asia Pacific (excluding Japan) also saw an uptick in business optimism, while optimism in North America decreased during the same period. It swung from 6 percent in the fourth quarter of 2011 to 52 percent in the second quarter of last year, before falling back to just 1 percent by year-end.

What is holding these countries back is the cost of borrowing. More than a third (34 percent) of businesses in the BRIC economies cite the cost of finance as constraints on their growth prospects, compared with 17 percent in Group of 7 countries.

More than a fifth of BRIC businesses cite the poor quality of local transport, information and communications technology and infrastructure as likely growth constraints in 2013.

With Agency Inputs

First Published: Thursday, January 24, 2013 - 09:24
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