Even as the rest of the world is expected to show moderate growth, India is likely to be a bright spot in 2016, as per the latest World Bank growth forecasts, that put India at the top of the heap among major economies.
India is slated to grow at 7.8% in 2016, which is not just notable among other major economies, but also represents an acceleration from 2015, when, the bank estimates growth to have been 7.3%. In its bi-annual report - Global Economic Prospects - the World Bank mentions India's ability to withstand volatility in financial markets, strengthening business cycle, supportive policy environment and low energy prices to be among the reasons for the growth.
Another notable feature of India's growth projections is that it beats China, to whom it is often compared, by quite a margin. The latter is expected to grow at 6.7% in 2016 - over 1 percentage point slower than India.
Further, despite global growth forecasts having been slashed by 0.4 percentage points for both 2015 and 2016 since the last update in June 2015, to 2.4% and 2.9% respectively, India has seen among the lowest cuts in forecasts - by a minor 0.1 percentage points in 2016 and 0.2 percentage points in 2015.
The big negative changes to forecasts are seen in India and China's other two major emerging economy peers: Brazil and Russia. Both Brazil and Russia are firmly in the throes of depression with their economies are now expected to contract by 2.5% and 0.7% respectively. South Africa, the relatively new entrant to the now 'BRICS' club is, however, expected to show a small 1.4% growth next year.
Even then, Brazil, Russia and South Africa are performing well below world average. Global growth is expected to accelerate to 2.9% in 2016 from 2.4% in 2015, as the pace of growth picks up in major advanced economies like the US, Euro area and Japan. The US and Euro area are expected to grow at 2.7% and 1.7% respectively, which is 0.2 percentage points each ahead of its estimated growth rate in 2015, Japan is expected to show a faster acceleration of 0.4 percentage points to 1.3%.
The article was first published in Business World online