With Western economies slowing and China caught in a damaging trade war with the U.S., India is expected to be the world’s fastest growing major economy in 2019, according to the International Monetary Fund.
The IMF predicts that India will see GDP growth of 7.5% this year, up from 7.3% in 2018. That’s ahead of China’s anticipated growth of 6.9%, and well beyond that of Western economies, which are seeing growth drop below 3%.
It’s expected that the UK, mired in the Brexit quagmire, will see growth of just 1.5% in 2019, while Eurozone countries won’t fare much better with an anticipated growth rate of 1.6.%. US GDP is expected to grow by 2.5%, though another government shutdown could push that number lower.
The IMF blames rising economic nationalism, a worldwide increase in public and private debt, and the Brexit mess for its cautious forecast.
“The main shared policy priority is for countries to resolve cooperatively and quickly their trade disagreements and the resulting policy uncertainty, rather than raising harmful barriers and further destabilizing an already slowing global economy,” IMF officials said, in a statement.
Much of India’s growth can be attributed to its emergence as a global, tech powerhouse. At the World Economic Forum in Davos, Tech Mahindra CEO CP Gurnani said he’s expecting another strong year for the country’s IT sector. “Technology is at the core of everything we do, be it solving the skills problem or sustainability issues,” said Gurnani.
India last year surpassed France to become the world’s 6th largest economy at $2.6 trillion, and at current rates it could soon overtake the UK to move into 5th spot.
Despite its rapid growth, India’s continued expansion faces some potential roadblocks. In terms of ease of doing business, the country is ranked 100th by The World Bank.