Won’t India grow like China? Probably, but it’s still a lot of growing up
Economists at US investment bank Morgan Stanley said that while Morgan Stanley is optimistic about India's prospects, India is unlikely to achieve the long-term economic growth rate of 8% to 10%. % like China .
Bloomberg reported that Morgan Stanley's chief Asia economist, Chetan Ahya, said in an interview on Monday (March 18) that the long-term growth rate of the Indian economy will likely stabilize between 6.5% and 7%. %. He stressed that India is still far from replacing its most powerful competitor, China, as a global manufacturing hub.
Official data shows that China's economy grew at an average annual rate of 10% in the 30 years after the 1978 reform and opening-up.
Aya said India's economic development is limited by factors such as inadequate infrastructure and shortage of skilled workers. “These two constraints lead us to believe that India's economic growth will be strong, but in the range of 6.5% to 7% rather than 8% to 10%.” Which, by the way, would be an impressive achievement.
However, Morgan Stanley remains optimistic about India's prospects, noting in a recent report that the country's current economic expansion is similar to the boom period of the mid-2000s, driven by ongoing fiscal investment growth that will begin to April.
A complex comparison
In reality, the fact that India does not grow like China post-opening is something almost obvious, considering the differences between the two economic systems. India is not China: it was not a communist society compressed by dirigisme which was partially liberated and entered the international economy from one day to the next, as happened with Deng Xiaoping's China. India has been in the international economic system since its independence.
It is a democratic country, with its contradictions which are reflected in complex, abstruse regulations which slow down its growth. However, this is not something episodic, but, if anything, a long-term path that comes from the past.
India is not China, but that doesn't mean that it can't calmly surpass it. Because Chinese growth may not be as continuous as India's.
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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/lindia-non-crescera-come-la-cina-probabile-ma-comunque-e-un-bel-crescere/ on Mon, 18 Mar 2024 12:57:26 +0000.