Economist Says India to Outpace China in GDP Growth
Dec. 14, 2006 - India would overtake China next year as the world’s fastest-growing major economy on rising consumer and government spending, Credit Suisse’s chief Asia economist Dong Tao said.
Credit Suisse raised its 2007 growth forecast for India’s $775 billion economy, Asia’s fourth biggest, to 10% from 8.5%, Tao said. China’s $2.2 trillion economy is expected to grow 9.9% next year from 10.4% in 2006, he said.
Surpassing China’s expansion rate for the first time at least in two decades may help lure the overseas investment India needs to replace dilapidated port and roads and create manufacturing jobs. Prime Minister Manmohan Singh needs rapid growth to lift 350 million people out of poverty in the world’s second-most populous nation.
“India’s growth story will only get stronger, said DH Pai Panandiker, president at RPG Foundation, an economic policy group in New Delhi. “There is a lot of money available to spend in India.”
Per-capita income in India has doubled in the last nine years and the number of households earning an annual income of at least $10,000 is rising more than 20% a year, according to McKinsey. Commercial banks’ outstanding loans have doubled in the past three years and have risen over 30% since April 1.