The International Monetary Fund(IMF) predicted that India and China would account for half of the global growth in 2023. According to the latest outlook of the IMF, India will remain the bright spot along with China in the global economy. Both countries witnessed a strong recovery from the Covid19 slowdown and noticed faster economic growth. According to the experts, India’s GDP is forecasted to be around 12.5%, while China can reach up to 8.1% due to the recent pandemic wave.
However, IMF also shares the data regarding the decline in India’s economy in the last fiscal year, which was about 6.8 per cent. On the other hand, China also went through an economic slowdown for the first time in 40 years. Its GDP was downgraded in the fourth quarter of 2022 by 3 per cent, below the global average. In the economic forum, the IMF projected the growth of China up to 5.3 per cent in 2023.
Pierre- Olivier Gourinchas(Chief Economist of IMF) wrote in a blog, “The global economic growth proved surprisingly resilient in the third quarter of last year, with strong labour markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe.”
Another relevant point here is that various economists see India and China as the most significant contributors to the world’s economic growth. Countries like the United States Of America are going through a recession that will not slow down in the coming months of 2023.
While the IMF predicted that India and China will account for 50 per cent of global economic growth in 2023, the other aspect of this scenario is the large population of these Asian countries. Bloomberg says that India already overtakes China’s population, and estimates that India has 5 million more people compared to china. The outcome of more workforce will depend on how the Indian government plans to boost its economy.