India will be a $30-trillion economy by 2030, and India’s growth rate could begin to outpace China’s by 2012, says a report prepared by Standard Chartered’s global research team. The report predicts China’s growth rate in 2012 will be 8 per cent, while India’s will be 8.8 per cent.
India will be the world’s third-largest economy in 2030, with a race on for the top slot between the US and China. China may well overtake the US to become the world’s top economic superpower within a decade, the report adds.
According to StanChart, the world economy will reach $308 trillion by 2030; China will be a $73-trillion economy and India a $30-trillion economy. Today, India is a little over a trillion-dollar economy.
While China is predicted to grow at 6.9 per cent over the next 20 years, India’s growth is projected at an average of 9.3 per cent over the period. The report foresees the Chinese yuan appreciating from 6.64 this year to 4.39 and the rupee from 45.5 this year to 35 against the US dollar in 2030.
The report also points to Asia as the main driver of global growth over the next two decades. During this time, global output is predicted to more than double in real terms, having risen more than 50 per cent in the last 10 years.
The report says the world is in a persistent period of high economic growth, or a super cycle, which began in 2000. While the global economy has already doubled between 2000 and 2010, it is predicted that it will grow to over $300 trillion by 2030, from $62 trillion today.
While the developed world will continue to grow through the super cycle, it is the emerging markets that will be the star performers. The “new world order” will be one where the global balance of economic power will shift from the West to the East, according to the report.
Gerard Lyons, chief economist and group head of global research at StanChart, says: “A super cycle builds on this concept, reflecting both the potential upside in terms of strong global growth as well as the fact that, whilst emerging economies will be the main drivers of growth, the West, too, has the ability to benefit from the changing global economy by adapting and changing.”
The key drivers of the super cycle will be increased emerging market trade, rapid industrialisation, urbanisation and flourishing middle classes in the developing world.
A super cycle is defined as “a period of historically high global growth, lasting a generation or more, driven by increasing trade, high rates of investment, urbanisation and technological innovation and characterised by the emergence of large, new economies, first seen in high catch-up growth rates across the emerging world.”
The study outlines three ‘super cycles’ of growth in modern times: From 1870 to 1913 (first world war eve); from 1945 to 1973 (oil crisis) and now a third one from 2000 to 2030. While previous super cycles were driven by the relatively small populations in the West, this super cycle will ride on the rise of 85 per cent of the world’s population.
