India to overtake China in terms of GDP growth by 2018

Its new tax system is accelerating growth whilst China is on a gradual nosedive.

India is fast becoming the region’s economic powerhouse as it is poised to overtake China in terms of GDP growth over the next five years, according to BMI Research.

India is forecasted to maintain a slight lead ahead of China in 2018 as the former’s 6.7% GDP growth is modestly larger than the latter’s projected 6.5%. However, India’s lead is projected to exponentially increase as Asia’s rising economy is expected to register 6.4% growth compared to China’s decelerating 5.4% by 2022.

BMI attributes this economic expansion to India’s implementation of the new goods and services tax (GST) which is anticipated to boost investment activity and enhance business environment.

China, on the other hand, faces a gradual slowdown amidst moves by the administration to tackle structural issues including overcapacity in the industrial sector, overheated housing market and excessive local government debt.

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