World Bank Bumps India to Front of the Pack for Predicted GDP Growth in 2015

The World Bank announced new predictions for gross domestic product (GDP) growth among the world’s nations through the end of 2015. Although it slightly downgraded India’s overall annualized growth rate prediction, it was enough to put India in the number one seat for GDP growth by the end of the year.

The World Bank announced new predictions for gross domestic product (GDP) growth among the world’s nations through the end of 2015. Although it slightly downgraded India’s overall annualized growth rate prediction, it was enough to put India in the number one seat for GDP growth by the end of the year.

According to the new prediction, India replaces China in first place, with projected growth set at 7.5 percent. China has been downgraded to a still quite respectable 6.5 percent. The World Bank’s prediction results from India’s efforts to solidify its broad-based technological and export capabilities.

India’s Prime Minister, Narendra Modi, has led the consolidation charge, calling for reforms to its industrial and commodity-producing base. This, in turn, has created enormous benefits for both domestic and export sectors.

China, on the other hand, has maintained its unprecedented growth rates that have spanned a quarter of a century, but has seen its growth slow over the last two quarters. China now plans to shift its focus from expansion to enhancing its own domestic consumer sector. These efforts have already borne fruit for the nation’s consumer sector, but have led to great volatility in its stock market. Moreover, concerns over the shrinking construction sector and inflated government-provided growth figures have left many in doubt about the veracity of the nation’s actual economic performance.

However, as a whole, the world’s developing economies appear to be experiencing a setback in growth. A large segment of the developing world should have boosted exports from other parts of the world and had a positive influence on global recovery failed to perform as expected. Much of this inadequate performance can be traced back to stalled infrastructure programs, poor leadership in developing nations, and inadequate investment. These situations require trillions of dollars in investment to upgrade roads, railways, ports, and other infrastructure, but the funds just have not been provided.

These shortcomings in the developing world have offset economic recovery in other parts of the world, such as Japan and Europe. Nations like Brazil and Russia have suffered from the fluctuations in prices for oil, while Turkey and Indonesia have suffered reductions in growth that some fear may actually lead to small contractions by the end of the year.

In the most developed nation in the world, the World Bank also downgraded the prediction for the United States. Suffering from a first quarter that saw some of the worst weather and labor relations in years, US growth for 2015 was downgraded to just 2.7 percent (a 0.5 percent reduction from earlier this year).

Although 2015 will show minuscule improvement over the previous year, the World Bank still believes that 2016 holds hope for a more positive leap in economic growth. However, the World Bank warns that a number of unstable geopolitical issues make an economic prediction for 2016 difficult and premature at this time.