India is catching up with China. Over the next two years, as long as we are spared another global financial crisis, India should start matching China’s economic growth of around 9 per cent. Then, by 2013-15, we think India will start outpacing China’s GDP growth notably.
We expect Chinese growth to slow marginally to a more sustainable rate of 8 per cent by 2013-15, following the remarkable 10 per cent average over the past 30 years. Meanwhile India’s growth will accelerate to a sustainable 9-10 per cent, after an average of 7.3 per cent over the past 10 years. What’s more, we expect India’s per capita income to reach China’s 2009 levels of $3,750 over the next 10-11 years. But what exactly will drive India’s growth rates higher?
It will be three things that we call the DRG factors: demographics, reforms and globalization.
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