China overtakes India to be the World’s fastest growing Economy after India reports slow economic growth in the Jan-March quarter as well
Words: Vandana Devi Images: Various Sources
The Indian economy has reported slow economic growth for the fourth consecutive quarter with the January-March quarter showing a fall from from 7% to 6.1%. The GDP growth also fell from 8% to 7.1%. India is no longer the fastest growing economy in the world, with China taking over that position. China recorded a growth rate of 6.9% for the same period.
Economists argue that this slowing down can be attributed to demonetisation which negatively affected sectors like construction. Finance Minister Arun Jaitley however said that there were several factors which affect economic growth as measured by GDP and went on to say that India was slowing down even before demonetisation. Inflation has also played a role with the rise in commodity prices and pent-up demand after remonetisation. Consumption and Investment also took a hit.
World Bank has forecast India’s growth to rise to 7.2% in 2017-18 and Jaitley expects that the roll out of GST will also lead to growth. Also, with the impact of demonetisation fading out, the economy will gather momentum with consumers spending and companies expanding capacity. It won’t be too long before India pushes forward and becomes the fastest growing economy yet again.