India gears up to grow faster than China in 2016: IMF

LAHORE: India may be criticised for housing 179.6 million of the world’s 872.3 million humans living below the new World Bank poverty line, but the International Monetary Fund’s most recent World Economic Outlook Report has predicted that the largest global democracy is all set to overtake China next year by growing at 6.5 per cent in 2016.
Should the IMF forecasts turn out to be correct, this will be quite an achievement for a country that has 17.5 per cent of the world’s total population and has 20.6 per cent share of the poorest people residing on the planet.
These World Bank estimates are based on its new poverty calculation methodology and purchasing power parity basis for measuring deprivation, pennilessness and impoverishment worldwide.
The new IMF report has projected that the Chinese economy will slow down to 6.3 per cent next year.For 2015, the IMF sees India growing at 6.3 per cent, up from 5.8 per cent in 2014, while China’s 2014 growth rate was 7.4 per cent—for the sake of a comparison.
Enthralled by the IMF projections, various leading Indian newspapers like The Hindu could not resist stating: “In a separate forecast also released on Tuesday, the United Nations World Economic Situation and Prospects (UN WESP) report too predicted a smart recovery for India during 2015. It pegged its 2015 India growth forecast lower than the IMF’s -at 5.9 per cent. At 6.3 per cent, the UNWESP 2016 India growth forecast is, however, closer to that of the IMF.”
NDTV India has gone on to quote Gian Maria Milesi-Ferretti, the deputy director in IMF’s Research Department, as saying: “I think the reform plans of the new prime minister are promising. We are going to have to see the speed of the implementation.”
Meanwhile, talking about the IMF calculations with reference to the global economic growth in 2015, the London-based international news agency Reuters has maintained: “Global growth is projected at 3.5 percent for 2015 and 3.7 percent for 2016, lowering its forecast by 0.3 percentage points for both years. The United States was the lone bright spot in an otherwise gloomy report for major economies, with its projected growth raised to 3.6 percent from 3.1 percent for 2015.”
About China, Japan and the Euro Zone, this is how the 164-year old news agency Reuters has quoted the latest IMF assessment: “The IMF predicts that a slowdown in China will draw a more limited policy response as authorities in Beijing will be more concerned with the risks of rapid credit and investment growth. The Euro Zone and Japan could suffer a long period of weak growth and dangerously low inflation.”
It is noteworthy that the IMF has called for governments and central banks to pursue accommodative monetary policies and structural reforms to support growth.