India, along with five other emerging economies, will account for more than half of all global growth by 2025, the World Bank predicts. The bank also showered praise on Tata’s Nano car as an example of the importance of research and development.
The bank said in its ‘Global Development Horizons 2011—Multipolarity: The New Global Economy’ report that Brazil, China, India, Indonesia, South Korea and Russia will help drive growth in lower income countries through cross-border commercial and financial transactions. It said the international monetary system will no longer be dominated by a single currency.
The report projected that as a group, emerging economies will grow on average by 4.7 per cent a year between 2011 and 2025.
Advanced economies, meanwhile, are forecast to grow by 2.3 per cent over the same period, yet will remain prominent in the global economy, with the euro area, Japan, the United Kingdom, and the United States all playing a core role in fuelling global growth.
China and India are likely to be the main flag bearers among emerging market growth poles in the years ahead, according to the report. The combined real output of six major emerging economies will match that of the euro area by 2025. “Today’s emerging economies will, in real terms, account for 45 per cent of global output, compared with about 37 per cent in 2011 and 30 per cent in 2004,” it said.
These countries will account for about as great a volume of international trade and investment flows as the developed world, and the drivers of global growth will be not only developed giants, but also major developing countries such as China and India.
The report said innovation and innovative capacity were already rising in emerging economies. “The setting up of major research facilities in China by Microsoft, the invention of the Nano microcar by Indian firm Tata, and the continued string of aeronautical breakthroughs in Russia suggest the emerging-economy giants’ strong potential for fostering growth through technological advancement,” said the bank.
The report said the most likely global currency scenario in 2025 will be a multi-currency, once centered around the dollar, the euro, and the renminbi.
