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Feb 9, 2005

India's economic growth may top China's by 2015

LONDON - India's economic growth could actually exceed that of China by 2015 and the country has the potential to deliver the fastest growth over the next 50 years, Goldman Sachs, an investment bank, has estimated.

The Indian economy expanded by 8.2% in 2004, only slightly behind China's growth of 9.5% and nearly three times Britain's rate of 2.8%, The Sunday Times reported Tuesday, quoting Goldman Sachs.

"Growth in India could actually exceed that in China by 2015."

Dominic Wilson at Goldman Sachs said: "India has the potential to deliver the fastest growth over the next 50 years with an average rate of more than 5% a year for the entire period. China's growth is projected to drop below 5% around 2020."

The bank predicts that India will overtake Britain in 2022 and Japan in 2032 to become the third-biggest economy in the world after China and America.

Strong economic growth is expected to translate into robust stock-market returns as company profits increase and foreign investment floods in, the report said.

The Indian stock market could deliver an average return of 10% a year over the next 50 years, according to research by Standard Life Investments.

Richard Batty, global investment strategist at Standard Life, said: "The balance of economic power in the world is set to shift dramatically over the next 50 years, presenting a great opportunity for investors, particularly in India and China."

(Asia Pulse/PTI)

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