Sorry China, but it’s time to step aside. By next year, India could be the world’s fastest-growing large economy.
That’s the view of a growing number of economists, many of whom think China’s economy will continue to slow this year and next, while India reaps the benefits of lower oil prices and policy reforms.
The International Monetary Fund became the latest organization to make the call, on Tuesday projecting that India’s economy will grow by 6.5% in 2016, faster than China’s predicted 6.3% expansion.
The IMF said it expects Beijing to tolerate weaker growth as policymakers push through needed structural reforms. India, meanwhile, will power ahead.
“In India … weaker external demand is offset by the boost to the terms of trade from lower oil prices and a pickup in industrial and investment activity after policy reforms,” the IMF said in its report.
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