India’s growth is set to beat China’s, but economists aren’t cheering
- The 9.5 per cent full-year growth forecast for India looks set to outpace China’s 8.5 per cent, but analysts say the figure is driven by a low-base effect
- Output is straggling, consumer sentiment remains lower than pre-pandemic levels and inflation is eating into household incomes
Now, he lines up with other men on a street corner in the Indian capital where contractors recruit day labour. “It’s all I can get,” said Shah, who earns a fraction of his former salary.
India just reported its economy grew by a record 20.1 per cent in the first quarter. Economists have forecast full-year growth of 9.5 per cent for the South Asian nation in 2021-22, beating all major economies – including China, which is seen as expanding by 8.5 per cent.
But for people such as Shah who are struggling, an upturn looks some way off.
The government says the April-to-June numbers are a classic example of a “V-shaped economic recovery”. But the devil is in the details.
The economy is doing fine in some sectors, such as agriculture and exports. But the headline growth figure is the statistical equivalent of an optical illusion, economists say.