India, with a projected annual growth rate of 7 per cent, has the potential to be the world's fastest growing economy over the coming decade, surging ahead of its South Asian economic rival China that will continue to see a slowdown, Harvard researchers said in new forecast.
"India has the potential to be the fastest growing economy over the coming decade. India tops the global list for predicted annual growth rate for the coming decade, at 7.0 per cent," new growth projections presented by researchers at the Centre for International Development (CID) at Harvard University showed.
"This far outpaces projections for its northern neighbour and economic rival, China, which the researchers expect to face a continued slowdown to 4.3 per cent growth annually to 2024, the report said. South Asia and East Africa have the greatest potential for "rapid growth" as oil economies and other commodity-driven economies face the slowest growth outlook, it said.
"India has made important gains in productive capabilities, allowing it to diversify its exports into more complex products, including pharmaceuticals, vehicles, even electronics," said Ricardo Hausmann, Professor of the Practice of Economic Development at Harvard Kennedy School and CID director. Hausmann noted these gains in economic complexity have historically translated into higher incomes.
"China has already realised many of these gains, doubling per capita income in less than a decade. We expect that India's recent gains in complexity, coupled with its ability to continue improving it will drive higher incomes, positioning India to lead global economic growth over the coming decade," he said.
The CID data predicted that growth in emerging markets will continue to outpace that of advanced economies, though the gap is closing. CID is also bullish on East Africa, with Uganda, Tanzania and Kenya ranking in the top 10, with all predicted to grow at least 5.5 per cent annually.
The growth forecast also looks favourably on Southeast Asia, where the Philippines, Malaysia, Indonesia and Vietnam look to drive growth well above global averages. Growth in advanced economies remains slow by comparison, though it has risen slightly in the projections in recent years.
The US is expected to grow at 2.8 per cent annually to 2024, with higher growth predicted in the United Kingdom (3.2 per cent) and Spain (3.4 per cent), and slower growth in Italy (1.8 per cent) and Germany (0.35 per cent).
The United Nations has also predicted that India will continue to be the fastest growing economy in the world in 2016 and 2017, projected to grow by 7.3 per cent next year and 7.5 per cent the year after amid a global order that will see persistent macroeconomic uncertainties, diminished trade flows and stagnant investment.