FX.co ★ India still has long way to go before replacing China as global growth engine

India is unlikely to become the main growth engine of the global economy in the near future, HSBC Holdings estimates.

According to Frederic Neumann and Justin Feng, experts at HSBC Holdings Plc., India will hardly be able to displace China as a locomotive of world economic growth shortly. Moreover, they expect the gap between the two economies to widen in the coming years.

The International Monetary Fund projects that the difference in GDP growth rates in China and India will increase to $17.5 trillion by 2028. That is equal to the current size of the eurozone economy. Last year, the gap between their economies amounted to $15 trillion.

Nevertheless, many analysts are confident that India will become a major player on the global trade stage. The country has every chance of surpassing China in terms of services exports. Currency strategists at Barclays Plc. are bullish about India's economic future. They believe that a steady expansion of 8% per year will enable it to outpace China as a global growth driver in the next five years.

According to IMF forecasts, the Indian economy will grow by 6.3% in both 2023 and 2024. Growth in China is projected to stand at 5% and 4.2% respectively. Earlier, in July this year, the fund confirmed India's status as the world's fastest-growing major economy.