In the rosiest projection yet for India, it is likely to grow at 9.7 per cent in 2010 and 8.4 per cent in 2011, according to the International Monetary Fund's World Economic Outlook released on Wednesday.
The RBI's projection for India is 8.5 per cent for 2010-11, which is in line with other projections. The PM's Economic Advisory Council has also projected 8.5 in 2010-11, and 9 per cent in 2011-12.
The fund attributed its bullish outlook to "vigorous" macroeconomic performance by India. "Leading indicators—the production manufacturing index and measures of business and consumer confidence—continue to point up."
But the projection was even more bullish on China. It is projected to grow faster — at 10.5 per cent in 2010 and 9.6 per cent in 2011, driven primarily by domestic demand.
And the two Asian rivals are together leading the world economic recovery, as the developed nations continue to struggle with sluggish growth figures. "Asia entered the global crisis on a strong footing and is continuing to lead the global recovery," said the Fund, adding, "In most parts of the region, resilience in domestic demand—thanks in part to proactive policy stimulus—has offset the drag from net exports." While India did well because of "low reliance on exports, accomodative policies and strong capital inflows" China thrived because of "massive fiscal stimulus and credit expansion".
The advanced economies by contrast are projected to grow slowly.
GDP growth in the US, for instance, is projected to be 2.6 percent in 2010 and 2.3 percent in 2011.
And the Advanced European countries — the UK, Germany, France, Italy Spain and some others — are projected to grow at 1.7 per cent in 2010 and 1.6 in 2011.
The global trade is forecast to expand by 4.8 per cent in 2010 and 4.2 per cent in 2011, with a temporary slowdown during the second half of 2010 and the first half of 2011.