India’s economic growth may surpass China’s much sooner than initially expected, with the International Monetary Fund (IMF) forecasting earlier this week that Delhi will take the lead in 2015.
The IMF’s World Economic Outlook, released Tuesday, indicates that India’s growth rate will rise to 7.5% this year, while China’s is expected to drop to 6.8% from 7.4% last year.
India’s growth will “benefit from recent policy reforms” under new Prime Minister Narendra Modi, the report says, with the resulting rise in investment and reduction in oil prices. “Lower oil prices will raise real disposable incomes, particularly among poorer households, and help drive down inflation,” it predicts.
The IMF forecast was substantiated by a Monday report from research firm Capital Economics, which said consumer price inflation dropped unexpectedly in March and raised the possibility of a third unscheduled cut in interest rates this year.
With the World Bank also predicting that India’s growth rate will hit 8% by 2017, it looks like the upward economic trajectory anticipated by many when Modi came to power could have begun.
See The History of US—India Relations in 12 Photos
1942: The US held loose relations with "The British Raj" before Indian independence. Yet the Western nation did maintain an Airfield base in Dinjan,India during this time. (Photo by Ivan Dmitri/Michael Ochs Archives/Getty Images)Ivan Dmitri—Michael Ochs Archives/Getty Images1949: Indian Prime Minister Jawaharlal Nehru takes his first trip to the US and meets with President Harry S. Truman in Washington, Oct. 11, 1949. PhotoQuest/Getty Images1959: US President Dwight D. Eisenhower makes the first official state visit to India, joining Indian Prime Minister Jawaharlal Nehru at the Taj Mahal at Agra, India on Dec. 13, 1959.AP1962: The Kennedy Administration openly supported India during the Sino-Indian War. The US Air Force flew in arms and aid to Indian troops on the Chinese border, Nov. 1, 1962.Larry Burrows—The TIME & LIFE Picture Collection/Getty Images1973: In the early 70s, America's relationship with India deteriorated as the Nixon administration became close allies with Pakistan, viewing India as an ally of the Soviet Union. Here, President Nixon meets with Prime Minister Zulfiqar Ali Bhutto of Pakistan in the oval office of the White House in Washington on Sept. 18, 1973. AP1978: When the anti-Soviet Janata Party came to power in the late 70s, Indian relations with the US began to improve. President Jimmy Carter visited Indian Prime Minister Morarji Desai in New Delhi in 1978.Charles Harrity—AP1987: In the 1980s, the Reagan Administration began to provide limited aid to India and eventually defense technology such as combat aircraft and naval engines. President Ronald W. Reagan met with India's Prime Minister Rajiv Gandhi in Washington on Oct. 1 1987.Diana Walker—The TIME & LIFE Picture Collection/Getty Images1998: India began nuclear testing in Pokhran in 1998, despite strong condemnation from the US. President Bill Clinton imposed economic sanctions against India.T.C. Malhotra—Getty Images2005: After the Sept. 11, 2001 attacks, the US worked closely with India to strategically monitor the Indian Ocean and Suez Canal to Singapore. Here, US Secretary of State Condoleezza Rice visits Humayun's Tomb in New DelhiPrakash Singh—AFP/Getty Images2004: The US and Indian navies cooperated on rescue efforts after the Dec. 2004 tsunami that affected the Indian subcontinent. AFP/Getty Images2010: India-US relations became strained during the Obama Administration due to its policies on insurgents in Pakistan and Afghanistan. Pedro Ugarte—AFP/Getty Images2014: India's Prime Minister Narendra Modi speaks at Madison Square Garden in New York City on his first visit to the US as Prime Minister, after his US visa had been revoked and reinstated. Lucas Jackson—Reuters
