Last year, economists at the World Bank, the International Monetary Fund, and Goldman Sachs suggested that within a year or two, India’s economy might be growing more quickly than China’s. But official statistics published on February 9th revealed that India’s GDP rose by 7.5% in 2014, a shade faster than China’s economy managed over the same period (see chart).
India’s statistics were “re-based” a week ago and the base year for calculation of GDP was revised from 2004-05 to 2011-12, and partly as a result, GDP growth for 2013-14 was also revised from 5.1% to 6.9%. Economists agree that the economy is doing better now than it was in 2013 and that India has been a rare bright spot among emerging markets.
The economy is likely to pick up further since the recent falls in commodity prices are a godsend for India which imports 80% of the oil it consumes; Indians are happy that the double-digit inflation in the country has decreased for this trend has prompted India’s central bank to reduce interest rates in January, from 8% to 7.75%.
