IMF Says India Could Surpass China as Fastest Growing Economy

India could outpace China as the world’s fastest growing economy as soon as this year, according to International Monetary Fund director Christine Lagarde.

Lagarde, who was visiting India last week, said the country’s economy is expected to grow 7.5% in the upcoming 2015-2016 fiscal year, which begins in April, up from 7.2% in the current fiscal year.

At that rate, India would be the world’s fastest growing large economy, she added.

Late last year, the IMF had predicted that India’s economy would grow by 6.5% in 2016, faster than China’s predicted 6.3% expansion. Estimates have since been revised for Indian gross domestic product.

However even with the faster pace of growth, India doesn’t come close to China in terms of raw economic power.

China’s economic output totaled more than $10 trillion in 2014, compared with India’s roughly $2 trillion, according to IMF data. Also, predictions don’t necessarily always come true.

Still, Lagarde describe India as a “bright spot” in the outlook for global economic growth.

“The conditions are ripe for India to reap the demographic dividend and become a key engine for global growth,” Lagarde told students at an event organized at a women’s college in New Dehil on March. 16. “It is on the verge of a new chapter, filled with immense promise.”

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza