The Other Side of Growth
Policymakers in China and India must avoid their Japanese counterparts' mistake and accept that GDP growth will inevitably slow. There is a lot that they can still do to improve the welfare of their citizens, and help us cling to some hope about our planet’s future.
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BOSTON – One of the most worrying news stories of 2019 did not receive the coverage one might expect from media outlets in the United States or Europe. But the economic slowdown in China, and the potentially steep deceleration in growth in India, will most likely receive considerably more attention in 2020.
The International Monetary Fund, the Asian Development Bank, and the OECD have downgraded their growth estimates for India in 2019-20 to around 6%, which would be the lowest since the beginning of the decade. Others claim that even this is optimistic and project much more dire narratives. For example, Arvind Subramanian, until recently the Indian government’s chief economic adviser, has argued, based on triangulating evidence on various economic indicators, that growth may sink as low as 3.5%.
In China, GDP growth has slowed from 14.2% in 2007 to 6.6% in 2018. The IMF projects that it might fall to 5.5% by 2024. Rapid growth there and in India have lifted millions out of poverty, and the slowdown is likely to impede progress on improving the lives of the poor.
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