India to surpass China’s economic growth in 2015-16: IMF

India will overtake China as the fastest growing emerging economy in 2015-16 by clocking a growth rate of 7.5 per cent, the IMF said.

By: Press Trust of India | Washington | Updated: April 15, 2015 1:27 am

economic growth, china, india

Written By: Arun S

For the first time since 1999, India will outgrow China and its BRIC peers with a GDP growth of 7.5% this calendar year and the next, the International Monetary Fund (IMF) projections released Tuesday showed.

The oil price fall and the positive effects of the exchange rate movements will help the world economy to be on the path to a stage a slight recovery, it said. Overall, global growth is forecast at 3.5% in 2015 and 3.8% in 2016, broadly the same as last year, the global body said in its latest World Economic Outlook.

Though India, a major oil importer, will be a big beneficiary of the decrease in energy prices as it consequently is increasing real income and spending, the IMF forecast comes as a booster for the Narendra Modi government’s reform initiatives (including the ‘Make in India’ push and ensuring the passage of Bills on insurance and coal mines in Parliament as well as pruning red tape) to improve business confidence and the Reserve Bank of India’s efforts to bring down inflation.

India’s growth is likely to improve from 7.2% in 2014 to 7.5% both in 2015 and 2016 (up 1.2% and 1% from the January WEO forecast), China’s growth is projected to slip from 7.4% in 2014 to 6.8% this year and further down to 6.3% next year. However, IMF has suggested an important structural reform agenda for India to reap productivity gains. This includes removing infrastructure bottlenecks as well as reforms to education, labour, and product markets for raising labour force participation and productivity.

Even as the government is pushing forward with the subsidy reforms, the IMF said lower oil prices offer an opportunity to decrease energy subsidies and replace them with better-targeted programmes. Given the short-term political costs associated with many of these reforms, the challenge(for countries, including India) will be to choose carefully among them, said Olivier Blanchard, IMF Economic Counselor and Director of Research.

He further said the growth is stronger in advanced economies (US, Europe and Japan) and lower in emerging economies (China, Brazil and Russia). IMF said though macro risks (recession and deflation in euro area) have decreased, risks stemming from factors related to financial (sharp dollar appreciation) and geopolitical (events in Ukraine, the Middle East, and West Africa) developments have increased and could generate regional and global spillovers. However, the euro and yen depreciations helping the euro area and Japan respectively and the US having some policy room to offset the adverse effects of the dollar appreciation, are, on net, good news for the world economy, it observed.

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  1. A
    Avijit Paul
    Apr 15, 2015 at 11:48 am
    India ko harane bala koi nahi..... because India open minded hay isility ah 20 years ke andar suprime power bon jayaga Jai Hind
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    1. K
      Kaliyug
      Apr 14, 2015 at 10:33 pm
      World Bank measures what weaponry is being bought from the West by which country, in that respect China does not buy as many weapons like India. True progress can be seen in China at every corner, people have clean cities, options to live in good areas, good schools, access to good ground transportation, clean drinking water, health care and food to eat. I have not seen grinding poverty like in India in China. China is also actively discouraging poor people from breeding like mosquitoes and, using their voting rights to bring everyone's standard of living to a standstill.
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      1. J
        jbhan
        Apr 14, 2015 at 9:56 pm
        India's main problem has been a measly economic growth. I mean growth that is inclusive in terms of benefits to all segments of society. The China model is very much relevant for India, since at no time in history have so many people (approximately 400 million) been lifted out of poverty in such a short time. This was done following the Singapore model of Lee Kwan Yew. Tremendous economic growth was combined with redistribution, not in the form of dole outs, but in the real and meaningful way in the form of creation of jobs related to infrastructure development. Safe water, sanitation, schooling, skill development of the labour force, etc, will all be possible only if the nation has money to spend. That comes through enhanced economic activity and we should remove all economic blocks to unshackle the economy. The successive so-called socialists ruling cles have thrived in palaces, built tremendous ill-gotten wealth, while keeping people in economic slavery! Let us hasten economic reform....
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          michael
          Jul 7, 2015 at 4:30 pm
          Great time ahead for India. It has to strictly follow the structural reform agenda proposed by IMF and should try to remove all relevant obstacles from infrastructure field and provide good education to labor for increasing in productivity. This will be really true path towards 'Make in India' concept.
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          1. C
            C. A.
            Apr 14, 2015 at 11:48 pm
            ACCORDING TO INTERNATIONAL MONETARY FUNDS GLOBAL PROJECTIONS THAT INDIAS GROWTH RATE IS LIKELY TO IMPROVE FROM 7.2 % in 2014 to 7.5 % both in 2015 AND 2016 ( up 1.2% and 1 % FROM JAN )', WHILE CHINAS GROWTH IS PROJECTED TOMSLIP FROM 7.4 %! IN 2014 TO, 6.8 %! THIS AND FURTHER DOWN TO 6.3 % WHICH HAS CLEARLY PROVED THAT INDIAN ECONOMY IS GOING RIGHTLY IN THE RIGHT DIRECTION WHICH IS CONDUCIVE TO FURTHER GROWTH IN OUR ECONOMY AND IT IS A SWEET NEWS WE HAVE SURPED CHINAS ECONOMIC GROWTH FOR THE FIRST TIME SINCE 1999. INDEED IT IS A GREAT CREDIT FOR US.
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            1. P
              parwesh pandit
              Apr 15, 2015 at 3:40 am
              What is your opinion?
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              1. P
                Packard
                Apr 14, 2015 at 10:35 pm
                China is almost an industrialised country with much higher per capita income.
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                1. V
                  Vikas Nayak
                  Apr 14, 2015 at 11:14 pm
                  Practically it is not possible this year as lot of graves are yet to fill. In 2016 India can overtake China in terms of percentage growth rate. And of course in next three years the economic scenario of India would be considerably amazing.
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                  1. R
                    RAIS AKHTAR
                    Apr 14, 2015 at 9:16 pm
                    IMF and The World Bank come out of a growth figures saying that India will surp China. GDP growth is not important but the distribution of growth in all parts of India.We must follow policies to enrich our people provide them access to safe water and sanitation, and not produce BILLIONAIRES located in Mumbai .We feel ashamed that our Social Development index is poorer than neighbouring countries of stan,even bangladesh,and Sri Lanka.What kind policies we had been following since independence.We just forget comparison with China, and look for the socio-economic development of our people.
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