China's economy will be larger than America's in 20 years,but India's will be growing faster, says a new US intelligence report.
“India’s rate of economic growth is likely to rise whileChina’s slows,” Reuters quoted the report, issued by the US government'sNational Intelligence Council, as saying. “In 2030 India could be the rising economicpowerhouse that China is seen to be today. China’s current economic growth rate“ 8 to 10 percent “ will probably be a distant memory by 2030.”
Asia as a whole will also overtake North America and Europecombined in global power by 2030, the report said, while the economies ofEurope, Japan and Russia are likely to continue their “slow relative declines.”
Despite the economic power of China, the authors expect theUS to retain its superpower status because it still is the only country able topull together coalitions and mobilize efforts to deal with global challenges,according to Reuters.
“China isn’t going to replace the US on a global level,”Mathew Burrows, counselor to the National Intelligence Council, said at a mediabriefing. “Being the largest economic power is important … but it isn’tnecessarily the largest economic power that always is going to be thesuperpower.”
Take both predictions with a grain of salt, or a handful, ifyou believe Morgan Stanley's Ruchir Sharma, the author of “Breakout Nations.”
With five key indicators out last week, a prominent globalbank expects positive signs of a comeback for the Indian economy.
Bank of America Merrill Lynch expects the Index ofIndustrial Production (IIP) for the month of October to show 5 percent growth,after contracting last month, according a national news report.
It doesn't expect the third round of quantitative easing bythe federal reserve, or QE III, to fuel domestic inflation.
The bank expects November inflation figures to have risen to7.5 percent ” but that this will represent a “peaking off” of the price risesthat have plagued India for a year or more.
The bank expects India's central bank to cut the cashreserve ratio (CRR) by 25 basis points to pull down lending rates to supportgrowth.
And it is hoping that the government will be able to pushthrough the banking bill and other reforms, following its success with the moveto allow foreign direct investment from retailers like Walmart.
