GDP growth slowing to a mere 6.8 percent is the kind of problem a lot of countries would like to have. But for China, it signals that the second-largest economy in the world is losing momentum. And worse still, one of its biggest regional opponents is set to be nipping at its heels any day now, according to the IMF’s latest predictions. The FT has more:
The IMF expects China’s slowdown to continue with growth of 6.8 per cent this year and 6.3 per cent in 2016, considerably slower than India, which is expected to expand by 7.5 per cent in both years, marking an important moment in the momentum of two of the world’s largest three economies, measured by purchasing power parity.With the IMF having lowered its view of the medium-term strength of the global economy in January, it sees the risks around its forecasts as balanced rather than weighted towards bad outcomes.
India and China have similar population sizes, but India is well behind China in terms of economic development, following more than a decade of breakneck growth by Beijing. The new IMF numbers suggest that India’s economic reforms (aided by low oil prices) are putting it on track to start catching up to its more successful neighbor to the north. This is the kind of news that makes Narendra Modi’s day.