Date
25 November 2017
Indian Prime Minister Narendra Modi has ambitious plans for cities like Allahabad to become tech-savvy 'smart cities'. Photo: AFP
Indian Prime Minister Narendra Modi has ambitious plans for cities like Allahabad to become tech-savvy 'smart cities'. Photo: AFP

India to overtake China in GDP growth: OECD

The Organisation for Economic Cooperation and Development expects India to overtake China in economic growth this year, Reuters reported.

For India, the OECD boosted its forecast for growth in gross domestic product significantly to 7.7 percent this year, 1.3 percentage points higher than it estimated in November.

The group of rich countries trimmed its forecast for China by 0.1 point to 7 percent.

“India is now expected to be the fastest-growing major economy in 2015-16, overtaking China,” the OECD said.

It predicted growth in India’s GDP will accelerate to 8 percent next year, while growth in China will slow to 6.9 percent.

For economies representing about 70 percent of the global economy – Brazil, Britain, Canada, China, the eurozone, India, Japan and the United States — the OECD said it is now expecting GDP growth of 4 percent this year, up 0.1 percentage point from its previous prediction.

The OECD said it now expects the eurozone to grow 1.4 per cent this year and 2 per cent next year. This is 0.3 percentage points faster than previously predicted for both years and in line with the latest forecasts from the European Central Bank.

It is the latest sign that low oil prices and the ECB’s quantitative easing program have raised hopes for the region’s recovery, the Financial Times reported.

But the OECD’s economists warned that the environment of low inflation and interest rates creates a growing risk of financial instability.

“Mispricing of risk was at the heart of the previous financial crisis, and such mispricing may be in evidence again,” the OECD warned, noting that a growing number of governments are now able to sell medium-term bonds at negative nominal rates.

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