World Bank Growth forecast: This year, India will overtake China in terms of GDP growth rate:

Thread: CURRENCY WARS: Foreign currency devaluations against yuan hurting exports, says China....INDIA TO OVERTAKE CHINA GDP GROWTH RATE

[link to blogs.worldbank.org]

t month, the World Bank and IMF both put out predictions that, this year, India would overtake China in terms of GDP growth rate. This caused a flutter and was widely reported around the world. How robust is this prediction and what does it really mean?

First, this is not as monumental a milestone as some commentators made it out to be. China has had one of the most remarkable growth runs witnessed in human history, having exceeded an annual growth of 9% from 1980 to now. Four decades ago its per capita income was close to India’s, but now it is four times as large as India’s. None of all this is going to change in a hurry.

With this caveat in mind, it is a year in which India deserves to feel good. It is expected to top the World Bank’s chart of growth rates in major nations of the world. This has never happened before. Before 1990, India did occasionally grow faster than China, mainly because China’s growth gyrated wildly during the pre-Deng Xiaoping period. It was, for instance, minus 27% in 1961, when Mao Zedong’s Great Leap Forward resulted in the world’s biggest famine, and it was 17% and 19% in 1969 and 1970, respectively--a relief in the wake of the Cultural Revolution. Fluctuations of this magnitude would be intolerable to India’s polity.

Since 1980, China has grown rapidly without interruption. Since 1990, its growth has continuously surpassed India’s. Hence, the World Bank’s forecast of India growing faster than China this year is a once in a quarter century occasion.

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Last Edited by Uncle Fuck Stick on 05/10/2015 06:37 AM