India to remain fastest growing economy, widen lead against China: OECD

The latest economic outlook report released by the Organisation for Economic Cooperation and Development (OECD) shows that India not only continues to be the world's fastest growing major economy but is also steadily widening its lead over China. The Paris-based global economic forum sees India's economic growth regaining strength and touching 7.5 per cent by 2020 from 7.2 per cent in 2019. Accommodative monetary policy and additional fiscal support will boost economic growth, despite subdued demand from partner countries, the report added.

 

On the other hand, China is expected to decelerate to 6 per cent in 2020 from 6.2 per cent in the last fiscal. The neighbouring nation had posted a 6.8 per cent GDP growth rate in 2017. So the gap between India and China in terms of GDP growth is set to widen from just 0.4 per cent in 2017 and 2018 to 1.4 per cent next year.

 

India's growth is expected to be fuelled by factors such as easier financial conditions, fiscal or quasi-fiscal support, steadily growing export orders and accelerating investment growth as capacity utilisation rises, interest rates decline, and geopolitical tensions and political uncertainty are assumed to wane. Recent structural reforms are also seen to be helping to support domestic demand.