Zeebiz Bureau
New Delhi, Jan 23: The collapse of the US financial institutions seems to have expedited the rise of the developing countries. According to a report by global accounting firm PricewaterhouseCoopers (PWC), India can overtake Japan as the world’s third largest economy by purchasing power parity (PPP) by 2012.
Though global investment major Goldman Sachs has made a similar prediction, it said India would overtake Japan only by 2032.
According to PWC, China will become the world’s largest economy by 2020, more than 20 years ahead of the earlier prediction of 2041.
“While the exact date is open to doubt, it seems highly likely that, by 2030, China will clearly be the largest economy in the world on PPP,” John Hawksworth, head of macroeconomics at PwC, wrote in the report.
It further said India would overtake China in terms of growth rate by 2020.
The effects of the global financial crisis on India and China, two of the world’s fastest economies, were largely limited and both countries returned to high growth rate in 2009 even as several Western economic giants including the US and Britain were grappling with slow growth and unemployment.
India’s economy expanded 7.9 percent in the second quarter of 2009-10 and is expected to grow over 7 percent in the whole fiscal. According to the key policy makers of Prime Minister Manmohan Singh’s government, India would return to 9 percent growth trajectory in two-three years.
On the other side, China stunned the global economy by registering 10.7 percent growth in the final quarter of 2009. Chinese economy expanded 8.7 percent in 2009.
With Japan facing one of the gravest crises of its history and still struggling to come out of, analysts think China will overtake Japan as the second largest economy this year.
First Published: Saturday, January 23, 2010, 11:52