Virendra Pandit
New Delhi: Compared to China’s economic slowdown, India’s faster growth is expected to make a bigger contribution—18 percent—to global growth, according to the International Monetary Fund (IMF).
The global lender expects India to increase its contribution to global growth over the next five years, even if temporarily, as the South Asian economy continues to grow rapidly, the media reported on Friday.
India will likely account for 18 percent of world growth by 2028, up from 16 percent at present, Krishna Srinivasan, the IMF’s Director for the Asia and Pacific Department, said in Mumbai on Thursday.
However, in terms of the size of their economies, China remains dominant. Based on the latest estimates from the IMF, China’s nominal GDP will increase to USD 23.61 trillion by 2028, while India’s will reach USD 5.94 trillion.
But China and India will jointly contribute about half of the world’s GDP growth in both 2023 and 2024, the IMF reported.
In a report released last week, HSBC economists Frederic Neumann and Justin Feng said that India is far from matching China’s contribution to the world economy, based on the size of the two economies and their share of global investment and consumption.
The IMF estimates India’s economy will expand by 6.3 percent this year and next. The Asia-Pacific might remain the “most dynamic region” this year, with a growth of 4.6 percent. However, the expansion is expected to slow to 4.2 percent in 2024 and to 3.9 percent in the medium term — “the lowest in the past two decades except for 2020,” it said.