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India to grow faster than China in 2013: E&Y report

JohnyD

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New Delhi: Bolstered by industrialisation, India is projected to grow at a faster clip than China with a 9% economic expansion in 2013, says a report by Ernst & Young.

It cautioned, however, that India needs to tackle rising inflation and said the country’s growth this year would be 7.2%, much lower than 8.2% recorded last year.

India’s growth rate would rise to 8% next year, according to the report released on Monday.

“The forecast pegs India’s real GDP growth rate to be the highest among all the Rapid Growth Markets (RGMs) starting in CY 2013, when the economy is expected to growth 9.5%, followed by China at 9%,” it said.

In 2014, India is expected to see an expansion of 9% while Chinese would see a growth of 8.6%.

The RGMs forecast focuses on 25 nations -- including India, China, Brazil and Russia -- that display strong growth potential and are, or could be, strategically important for business.

India and China would be able to better withstand a likely slowdown mainly on account of large size of their domestic markets as well as from beneficial effects of lower oil and commodity prices, E&Y said.

It pointed out that even though the overall outlook for India is positive, the country would need to address rising inflation.

Headline inflation, which has been hovering above the 9% mark since December 2010, stood at 9.72% in September.

“... provided India’s inflation does start to fall back by the end of this year and the US and EU economies do not slip back into recession, the soft patch for Indian growth should be relatively short-lived,” the report noted.

E&Y said that once inflation is in check and interest rates are no longer rising, consumers would be more willing to spend. This would support a general improvement in business environment, resulting in steady acceleration in growth next year.

“India enjoys an advantage in its high savings and investment rates, currently a third of the GDP; relatively low GDP per capita on purchasing power parity giving significant potential for growth and continuing industrialisation and urbanisation,” the report said.

E&Y India’s partner & India markets leader Farokh Balsara noted that India’s consumption-led economy continues to make the country a highly attractive investment destination in the short to medium term

India to grow faster than China in 2013: E&Y - Economy and Politics - livemint.com

India to grow faster than China in 2013: E&Y report
 
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yep:

BBC News - India raises interest rates and cuts growth forecast

India raises interest rates and cuts growth forecast

The increase comes amid a high rate of inflation that saw consumer prices rise 9.72% in September from a year ago.

The RBI also cut its growth forecast to 7.6% from 8%, citing worsening global economic conditions.

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Rising consumer prices have become a threat to India's economic growth
 
Hahaha remember this thread based on a World Bank prediction?

http://www.defence.pk/forums/world-affairs/77664-india-outpace-china-2011-wb.html

Now it's near the end of 2011. China is growing at around 9%, while India has slowed drastically, to around 7%.

This is the difference between actual facts and wet dreams.

Growth slowdown is a temporary blip . E & Y would have done their homework before coming out with this prediction. If inflation is curbed , I dont see any reason why we cant grow at 9 %. Seven percent growth your 'dry dream'. For wet dream you have to be a 'fertile' !!!!!
 
Growth slowdown is a temporary blip.

Temporary? You've never been able to sustain double-digit growth in the first place.

E & Y would have done their homework before coming out with this prediction.

From Moody's ratings agency:

India’s economy is likely to grow at 6.5% by mid-2012 from a growth of 7.8% year on year (YoY) in the first half of 2011, predicts Moody’s Analytics, a division of the global rating agency Moody’s. The agency is calling the engineering of a monetary policy led slowdown to fight inflation as a ‘failure’.

Inflation has been identified as the main problem with the wholesale price index registering a 9.7% annual growth in September 2011.

India slowing down sharply: Moody
 

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