World Bank expects India to inch closer to China in growth rate
Washington: India's growth is expected to inch closer to that of China in near future, a top World Bank economist said here on Tuesday.
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 percent and that of India 7 percent, 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 percent in 2012 to 2.4 percent in 2013, with the high-income countries remaining at the same level of growth of 1.3 percent 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 3.4 percent in 2013. We are expecting recovery in the case of China from 7.9 percent growth in 2012 to 8.4 percent in 2013.
"We are expecting a recovery in India from 5.1 percent growth in 2012 to 6.1 percent growth in 2013," Basu said.
"China is growing at a phenomenal rate right from 1978 or 1980 and you can't grow at 10 percent 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 percent...I think not. India was growing from 2003 to 2008 at close to nine per cent per annum, with the last couple of years actually over nine per cent, 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 eurozone countries, but even elsewhere in the world.