India to Outpace China in 2016 Too

India's economic growth clip this year and next will be better than previously assumed, overtaking China in 2015 to become the world's fastest growing major economy and widening the gap further in 2016, the International Monetary Fund (IMF) and the World Bank have said in separate forecasts.
Both IMF and World Bank see India's growth rising to 7.5% in 2015 from 7.2% in the preceding year, but have different assessments for 2016. IMF, which last January forecast 2015 growth at 6.3% and 2016 growth at 6.5%, has penciled in 7.5% growth next year while World Bank has the 2016 figure higher at 7.9%. The bank had last January pegged the growth rates at 6.4% this year and 7% in 2016. The Centre had budgeted 8.1-8.5% GDP growth in the year to end-March 2016. The numbers will be music to the Centre's ears, especially because the Indian economy , while being spoken of in the same breath as China in terms of economic potential, has never managed to surpass its giant neigh bour's growth rate. Even with a higher growth rate, India's $2-trillion GDP will remain much smaller compared with China's $10-trillion economy .
These estimates were released ahead of the IMF-World Bank spring meetings in Washington. Finance Minister Arun Jaitley is leading the Indian delegation which includes RBI Governor Raghuram Rajan, to the meetings.
The latest numbers, which are a significant upgrade on earlier assessments, take into account the much debated and questioned new numbers of the Central Statistics Office (CSO) as also reforms by the Narendra Modi government.
IMF has pegged China's growth a 6.8% in 2015 and 6.3% next year while the world economy is forecas to show no material improvement growing only 3.5% compared with 3.4% in 2014. World Bank sees China growing at 7% in the next two years
The strong growth in India has already made South Asia the fastest growing region in the world.

IMF said in many economies softer oil will help reduce inflation and lower external vulnerability and open room for structural reforms. IMF sees crude prices on average nearly 40% lower on a year ago in 2015, rising 12% in 2016.

IMF says India's inflation is expected to remain close to target in 2015. It sees consumer price inflation at 6% in FY15, declining to 5.7% in the following year. The latest data show consumer price inflation at 5.1% in March.RBI has a 6% inflation target by January 2016. IMF has also forecast a stable current account deficit, pegged at 1.3% in FY15 and 1.6% in FY16.
World Bank, on its part, pegged the current account deficit at well below 2% in the medium term and noted that India “has a resilient external position“ less than two years after the rupee depreciation episode.
It said the normalisation of US monetary policy -euphemism for interest rate increases -was less likely to have any effect on rupee exchange rate versus the dollar. IMF, however, warned there was a risk of sharp movements causing stress in countries that have seen built-up in corporate foreign currency exposures in recent years.