India's growth rate to surpass China

'New normal' creates opportunity, not uncertainty: PwC chair

Developing Asia will maintain strong economic growth in 2015 and 2016 as a pickup in India's economy and Southeast Asian economies will offset slowing growth in China, the Asian Development Bank (ADB) said Tuesday.

Developing Asian economies will grow 6.3 percent in both 2015 and 2016, unchanged from the pace in 2014, and they have contributed nearly 60 percent of the world's annual GDP growth since 2009, ADB said in its latest Asian Development Outlook report.

Economic growth in China will continue to decelerate to 7.2 percent year-on-year in 2015 and 7 percent in 2016 as the government targets lower growth to proceed with structural reforms, the report showed.

India's economy is projected to expand 7.8 percent in 2015, a significant rise from 7.4 percent in 2014, and the momentum is expected to build to 8.2 percent growth in 2016, according to the report.

Lower oil prices, improvement of external environment as well as the efforts of India's new leadership to advance reform and speed up infrastructure investment are key factors that will contribute to the pickup in India's economy in the coming two years, Zhuang Juzhong, deputy chief economist of ADB, said at the launch of the report on Tuesday.

An IMF report released early this month also predicted that India's GDP is expected to increase to 7.2 percent in the financial year ending in March 2015 and expand further to 7.5 percent in the next fiscal year, making it the fastest-growing major economy in the world.

"India's economy has greater room for improvement because its GDP per capita was previously low compared with that of China. And its economic pickup is good both for the Asian region and China because imports from India will become cheaper for China," Zhang Bin, director of the Global Macroeconomy Research Division under the Chinese Academy of Social Sciences, told the Global Times on Tuesday.

According to the latest World Bank statistics, measured by purchasing power parity (PPP), India's GDP per capita was $5,411.6, which is less than half of China's $11,906.5.

Despite China's deceleration of economic growth, China is likely to retain its position as the biggest contributor to world GDP growth in 2015 and 2016, the ADB report said.

If China continues to offer stability and improve rule of law and cut taxes, it will increase investors' confidence and allow them to invest more in it, Dennis M. Nally, chairman of PricewaterhouseCoopers International (PwC), said Saturday at the China Development Forum in Beijing.

The "new normal" of ­China's slower economic growth will not create uncertainty but opportunities, Nally said.