India leapfrogs China as world’s fastest growing economy

8 Feb 16

India has overtaken China as the world’s fastest growing economy, according to figures published by the country’s Central Statistics Office.


Despite a slowdown in the final quarter of 2015, the CSO’s figures record annual growth as 7.3% of gross domestic product, compared to 6.8% growth in China over the same period.

Ajay Marwaha, director of investments at Sun Global Investments, which specialises in emerging markets, said India remains a “bright spot” despite the recent volatility in emerging markets.

“Helped by low oil prices, the Indian government has made significant reforms to bring down the deficit and manage inflation. This, combined with the government’s ambition to make India the world’s preferred destination for investment through opening up the bond market, has created optimism around India’s growth trajectory,” he said.

He added that higher disposable incomes, increased government consumption and a marginal pickup in investments via capital expenditure give the firm reason to believe India’s growth rate was likely to straddle 8% in 2016.

The International Monetary Fund predicts India’s GDP growth to be 7.5% in both 2016 and 2017, compared to 6.3% and 6% for China.

The CSO’s figures recorded a slight slowdown in the final quarter, with growth lower than the 7.7% between July and September. Economic growth from April-June was also marked up to 7.7% from a provisional 7% reported earlier.

India’s government forecasts that GDP growth for the fiscal year ending in March 2016 will accelerate, from 7.2% to 7.6%.

However, many economists have concerns about the accuracy of the figures, which they argue are at odds with a number of other indicators that point to weakness in the economy, such as export levels, investment and flat order books. 

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