Recently, Barclays, a well-known foreign institution, published a report claiming that India's average economic growth rate from 2005 to 2010 was about 8%, and if India** set the goal of achieving such a growth rate in the future, then India's contribution to global economic growth may be close to China's.
Barclays Bank said that if India's future GDP growth rate is 61%, China's contribution to global GDP is estimated at around 26% over the five-year period to 2028, while India's contribution is estimated at 16%. If India's future GDP growth rate rises to 8%, it will bring India's contribution to global economic growth closer to China's.
In fact, India's GDP growth rate surpassed that of China only in 2022, and India's economic growth rate in 2022 was 67%, compared to China's growth rate of 3%. The main reasons include India's aggressive money printing and huge capital spending to stimulate economic growth. Coupled with the high base of China's GDP, in 2022, China's GDP size is more than five times that of India.
From 1990 to 2022, India is far inferior to China in terms of GDP growth rate and total GDP. Compared to 1990, GDP in dollar terms has grown by about 9 times in India, more than 3 times in the United States, and about 47 times in China.
In 1990, the GDP of China and India was basically at the same level, with the GDP of China and India being $360.9 billion and $321 billion, respectively, and by 2022, the GDP of China and India will grow to 1756 trillion dollars and 3.At $39 trillion, China is more than 5 times that of India.
Even in recent years, China's cumulative GDP growth has been significantly higher than India's. From 2017 to 2022, China's GDP has grown by 380%, India Lord 285%γIn the past three years, the gap between India's GDP and China's has been widening. According to an article published in India's Deccan Herald on July 4, China's GDP has grown by 3 percent in the past three years$8 trillion. At the same time, India's GDP grew by only 0$54 trillion. The gap between India's GDP and China's is widening.
Although, India's GDP growth rate will be higher than China's in the next few years, according to the OECD and other institutions, India's GDP growth rate in the next few years may be 1 higher than China's5 2 percentage points between. However, since China's GDP is much larger than India's, the gap between China and India's GDP will continue to widen.
According to Sina Finance, HSBC Holdings economists said in the report that although India's economic growth in recent years has been impressive, India is unlikely to replace China as the main growth engine of the world economy in the short term. India, they said, had "too little growth momentum" and China "too big to be easily overshadowed in its importance to the world economy."
HSBC Holdings economists expect the gap between China's and India's GDP to continue to widen for the foreseeable future. According to the International Monetary Fund (IMF), by 2028, China's economy will be 17 percent larger than India's$5 trillion, a gap equivalent to the current size of the European Union's economy. And last year, the economic gap between the two was about $15 trillion.
HSBC also said that it will take 18 years for India's investment spending to catch up with China, even assuming zero growth in investment spending in China and three times the growth in investment spending in India compared to the average in recent years. In other words, in the next few years, the gap between the GDP of China and India will not narrow, but will widen.
Therefore, in terms of contribution to global economic growth, China will still be significantly ahead of India, according to the International Organization (IMF), in 2023 and 2028, the country that will contribute the most to global economic growth will be China, accounting for 226%, India and the United States 12 each9% and 113%, ranking second and third.
In addition, the key drivers of India's economic growth in recent years β the massive money printing and huge capital expenditures β are unlikely to be sustainable in the long term, and India is also facing a series of serious problems such as severe inflationary pressures. Since 1991, India's currency** has risen 93 times, and India has printed a lot of money, causing the Indian currency to depreciate sharply. Since 2012, the Indian rupee has depreciated by nearly 40 per cent, and the US dollar has increased from 47 per cent to the Indian rupee in 201283 rises to 8336γ
At the same time, India's inflation has soared as a result, reaching 7% in 2023, exceeding the RBI's tolerance limit of 6%. In order to stabilize domestic prices, Modi has continuously tightened his grain export policy.
In the medium and long term. Due to the changes of the times, the regression of globalization, the rise of protectionism, the rise of a new generation of industrial revolution, and the consolidation of China's status as a global manufacturing power, India lacks the background of the times to become the world's factory, and it is difficult to become the world's factory and replicate China's economic miracle.
At the same time, the advent of the era of artificial intelligence will also deal a fatal blow to India's most critical pillar industry, the software outsourcing industry. These factors will become a bottleneck that India will be difficult to break through in the future.