PwC Report Ranks India As A “Star Performer” in 2016

A new PwC report suggests that India is expected to be a “star performer” among the emerging markets with a 7.7 percent growth in 2016 outdoing China. The global consultancy firm has predicted that China will slow down to a 6.5 percent growth in 2016 and India will take the lead.

The report has also stated that the economies of the G7 countries, namely the US, the UK, Japan, Germany, France, Italy and Canada, will grow at their fastest rate since 2010 with US and UK performing the best.

In a statement, PwC UK Chief Economist John Hawksworth said,

We expect the US recovery to switch into a higher gear in 2016, while the UK will also enjoy continued consumer-led growth. We should also see at least the beginning of the end of the Eurozone crisis. The once-mighty BRICs, however, will have another tough year in 2016, with the notable exception of India. For the second year in a row, we expect India to grow faster than China, expanding by around 7.7 per cent in real terms.

The emerging economies are expected to have slower growth than their average growth trend rate in the recent years, but will still grow faster than the G7 economies. Growth in China’s economy in 2015 has been the lowest for a number of years. Reports of weakening indicators in its manufacturing and services sector signal that the economy is slowing down. The Chinese stock market has been volatile in reaction, with the stock market dropping as much as 10 percent in early January.

The PwC report stated that India will reap benefits from the recent reforms rolled out by the government. The interest rate cuts by the Reserve Bank of India, moving it from 8 percent to 6.75 percent, are expected to boost consumption and investment in 2016. It also added that Foreign Direct Investment (FDI) is expected to rise given that foreign investment caps in most of the manufacturing sectors have been lifted over the past years.

It has also predicted that commodity prices across the globe will continue to remain low, benefitting most businesses, households and policymakers in commodity importing economies but will be a concern for economies that depend heavily on commodity exports.

The consultancy firm has noted that geopolitics will take priority and gain global attention in 2016 rather than economic issues. PwC has predicted that three key issues that will dominate the news in 2016 will be the migrant crisis in Europe, the international community’s response to the crisis in the Middle East and the referendum on the UK’s membership in the European Union.

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