Despite slowdown, India's GDP grows faster than China
2 min read 01 Mar 2023, 01:07 PM ISTDespite its lower-than-expected performance in the October-December quarter of FY 2022-23, India's GDP growth rate outpaced that of China
PremiumIndia's GDP data for the third quarter of FY 2023 projected a lower-than-expected 4.4% rise on Tuesday. The country's annual growth for the FY 2022-23 is expected to be at 7%, states the National Statistical Office (NSO). Despite a sharp quarterly fall in India's GDP in the October-December quarter, it has performed better than China. The GDP growth of India's Asian counterpart stood at 2.9% in the Oct-Dec quarter in 2022.
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Regardless of the fact that India reports its figures only for financial years, a rough estimates for results show India's GDP growth to be 7% for the 2022 calendar year, which is way less than the 3% GDP growth of China for the same calendar year, reported Nikkei Asia.
Unlike China, India depends on internal demand
There is a lot of difference in the growth story of India and China. China depends heavily on exports. Whereas, Indian economy is more dependent on its internal demand. Another reason for the contraction of the Chinese economy could be its strict COVID restrictions.
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Devendra Kumar Pant, chief economist at India Ratings and Research told Nikkei that countries that are “less integrated" with what happens at the geo-political level like the ongoing Russia-Ukraine crisis, are less impacted. He also pointed out that countries like China are reliant on external demand and have faced “more problems".
China's 2022 growth performance is weakest in decades
China's GDP growth of 3% in 2022 has marked the worst performance of its economy in decades. According to the preliminary estimates by National Bureau of Statistics of China, the gross domestic product wwas 121,020.7 billion yuan in 2022, which was a meagre 3 % rise over last year. China's GDP grew by 2.9 % in the fourth quarter year on year. The country's growth data for 2022 came after many financial institutions reduced their forecasts for China.
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Indian economy in the global set-up
The government has projected the full fiscal year growth of India to be at 7% for 2022-23 and upgraded its stance for the previous year 2021-22. Not just China, India is also outperforming other global economies as well.
According to the World Bank, the global growth is slowing due to rise in inflation, higher interest rates, reduced investments, Russia-Ukraine crisis, etc. It also hinted that factors like COVID 19 pandemic resurgence, geopolitical tensions can push the world into recession.
Looking at all the prospects, the World Bank has projected the global economy to by 1.7% in 2023 which is lesser than India's GDP growth forecast of 7% for the FY 2022-23.
