The global economy pressed down by stresses that have delayed international trade and elevated uncertainty. It is expected to observe a slower growth in the next half-decade across a wide area of economies. The IMF has brought out a list of global GDP growth estimate of nations who are going to be leading ahead by 2024.
According to estimates released this week by the International Monetary Fund Weaker, global growth is expected to fall to 3 per cent this year. This will be the slowest since the global financial crisis will affect 90 per cent of the world.
As per the estimates, China’s growth rate is expected to slow down and will be a smaller driver to global GDP growth in the near term. China’s share of global GDP growth is assumed to fall from 32.7 per cent in 2018-2019 to 28.3 per cent by 2024 — a comparably abrupt reduction of 4.4 percentage.
Growth Drivers of 2024
Though the US is expected to contribute a sizable share to world growth, is predicted to fall to third place, after India. America’s share of global growth is likely to slip from 13.8 per cent to 9.2 per cent by 2024.
Indonesia will continue in fourth place as its economy is assumed to have a 3.7 per cent growth share in 2024. There will be a slight descending adjustment from 3.9 per cent in 2019.
In case of UK, it will have to face a downtrend which leads to economy drop. It is expected to slip to 13th place from the currently held 9th position.
The report pointed out that for few major economies, such as India, Brazil, Mexico, Russia, and South Africa, growth in 2019 is sharply lower than in 2018, also for idiosyncratic reasons, but is expected to recover in 2020.
Russia’s contribution to global GDP is 2 per cent as of now. It will continue to maintain the same for the next five years. However, there is an assumption that the country is expected to replace Japan as the number five growth contributor. Japan will slip to ninth place by 2024. Germany’s share of growth is expected to remain at 1.6 per cent and 7th on the list while Brazil is projected to move up from No. 6 from the current No. 11.
As per the IMF’s estimate, the new growth engines among the top 20 countries in the next five years would include Turkey, Mexico, Pakistan and Saudi Arabia. On the other hand, Spain, Poland, Canada and Vietnam would drop out of the first 20.
What Does the IMF estimate state about India?
The world economy is currently running at the slowest pace since the global financial crisis. The US-China trade war has a significant role in the undercuts of business confidence and investment.
A positive note for India is that projected share is expected to rise up to 15.5 per cent and surpass the US within a span of 5 years.
World Economic Outlook (WEO) stated that India’s growth in 2019 has sharply declined to 6.8 per cent since 2018. However, it is expected to grow slowly by 2020. Adding to this, WEO stated that the reduction in India’s growth projection for this year “reflects a weaker-than-expected outlook for domestic demand.”
In India, growth weakened in 2019 as corporate and environmental regulatory ambiguity, together with concerns about the health of the non-bank financial sector, weighed on demand.
Despite this, India still maintains its status as the world’s fastest-growing major economy, joining with China, with a forecasted growth rate of 6.1 per cent for the current fiscal year.
As per the estimate of IMF India will surpass the US with respect to global GDP within 5 years. What has to now look into is with the present drop in the economy will India be able to surpass the US? Or will India’s position drop further?