Asia-Pacific’s Economic Shift: S&P Global Cites India Surpassing China

According to a recent report by S&P Global Ratings, India is poised to surpass China as the primary growth engine in the Asia-Pacific region. This significant shift in economic dynamics is largely attributed to India’s robust economic growth and the challenges facing China’s economy.

India’s promising economic trajectory is bolstered by its large domestic market, the purchasing power of its growing middle class, and the stability of its economic policies. The International Monetary Fund (IMF) and the World Bank forecast a 6.3% GDP growth for India for the fiscal year 2023-24. This positive outlook is despite global headwinds and geopolitical challenges, indicating the resilience of India’s economy.

In contrast, China’s economic momentum is waning, with issues in its property sector and high debt levels contributing to a slower growth trajectory. China’s GDP growth is projected to slow to 4.6% in 2024, with slight increases to 4.8% in 2025, before returning to 4.6% in 2026.

India’s GDP growth rate demonstrated its strength in the April-June quarter of 2023, reaching 7.8% year-on-year, up from 6.1% in the January-March quarter. This impressive growth occurred despite the high base year effects following a 13.1% growth in the April-June quarter of 2022. S&P Global expects India’s annual GDP growth to average 6.7% from fiscal 2024 to fiscal 2031, potentially increasing India’s GDP to $6.7 trillion from $3.4 trillion in fiscal 2023. This growth is driven by capital accumulation, with investment as a proportion of GDP reaching a 10-year high of 34% in fiscal 2023.

Furthermore, S&P Global Ratings has revised India’s economic growth forecast for the fiscal year 2023-24 to 6.4%, up from the earlier projection of 6%. This revision is attributed to robust domestic demand and is closer to the Reserve Bank of India’s estimate of 6.5%.

While India’s economic ascent marks a major shift in the Asia-Pacific region, the report cautions that global challenges, such as geopolitical tensions, high interest rates, and potential energy crises, could impact regional economic stability. Nonetheless, India’s Union finance minister, Nirmala Sitharaman, remains optimistic, citing the country’s large domestic market, middle-class purchasing power, and stable policies as key factors driving India’s robust economic growth​​​​​



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