The World Bank had yesterday released its latest issue of Global Economic Prospects 2013, in which the economies of developing countries like India, China and Brazil are projected to be recovering and higher growth rate.
The World Bank estimates global GDP grew 2.3 percent in 2012. Growth is expected to remain broadly unchanged at 2.4 percent growth in 2013, before gradually strengthening to 3.1 percent in 2014 and 3.3 percent in 2015.
Growth in high-income countries remains weak, with their GDP expanding only 1.3 percent in 2012 and expected to remain slow at an identical 1.3 percent in 2013. Growth should gradually firm to 2 percent in 2014 and 2.3 percent by 2015. In the Euro Area, growth is now projected to only return to positive territory in 2014, with GDP expected to contract by 0.1 percent in 2013, before edging up to 0.9 percent in 2014 and 1.4 percent in 2015.
China’s economy is expected to expand at 8.4 percent in 2013, before easing to 7.9 percent by 2015.
The World Bank expects that by 2015, the growth rate of China would be 7.9% and that of India 7%, World Bank Chief Economist Kaushik Basu told reporters during a conference call.
“We do expect India to inch closer to China and for a very, very good reason — not an analysis of what’s happened over the last one year or two years, but a bit of a sweep of history,” he said.
While the growth of the world economy growth is projected to inch up from 2.3% in 2012 to 2.4% in 2013, with the high-income countries remaining at the same level of growth of 1.3% in both 2012 and 2013, it is the emerging markets like India, China and Brazil that would show significant signs of recovery.
“Growth in Brazil had gone down quite sharply in 2012 of 0.9. We at the World Bank are expecting Brazil to make a recovery to 3.4% in 2013. We are expecting recovery in the case of China from 7.9% growth in 2012 to 8.4% in 2013.
“We are expecting a recovery in India from 5.1% growth in 2012 to 6.1% growth in 2013,” Basu said.
India was growing from 2003 to 2008 at close to 9% per annum, with the last couple of years actually over 9%, and we expect that India, having taken off only about 10 years ago, to have some still to go.
Many have predicted that India would catch up to China’s GDP growth rate, surpass it and eventually pass China in overall GDP. This has proved to be wrong for more than ten years. Prior to that no one made that prediction because India had a relatively terrible GDP growth rate.
I do not think it is certain that India will grow faster than Indonesia. Indonesia is likely to grow at 6.0 to 6.5% each year.