indica News Bureau –

China will become the largest economy by 2020 and India is likely to surpass the US to be world’s second largest economy by 2030, according to Standard Chartered’s long-term forecasts.

The report, based on Gross Domestic Product (GDP) rankings, projects trend growth for India to accelerate to 7.8 percent by the 2020s, while China’s will moderate to 5 percent by 2030.

“Our long-term growth forecasts are underpinned by one key principle: countries’ share of world GDP should eventually converge with their share of the world’s population, driven by the convergence of per-capita GDP between advanced and emerging economies,” Standard Chartered economists wrote in a note published in Bloomberg.

The report says that seven of the world’s top 10 economies by 2030 will likely be current emerging markets, while Indonesia will break into the top 5 economies.

The Standard Chartered report coincides with The World Bank forecast that India will continue to remain the fastest growing major economy in the world in 2018-19.

The World Bank reports that India’s GDP will grow at 7.3 percent during the ongoing financial year. In comparison, China is expected to register a much lower growth rate of 6.3 percent in 2018-19.

Further, the Bank’s forecast for growth among advanced economies is said to drop to 2 percent this year. Slowing external demand, rising borrowing costs, and persistent policy uncertainties are expected to weigh on the outlook for the emerging market and developing economies.

In the first quarter of 2018-19 ending June 30, India’s GDP grew at an impressive 8.2 percent, after 7.7 percent in the first three months of the year.

Thereafter, it slipped to 7.1 percent in the quarter ending September 30. Citing higher financing cost and reduced credit availability, Fitch Ratings slashed India’s GDP growth forecast to 7.2 percent for the current fiscal, from 7.8 percent projected in September.

A sudden zoom in crude oil prices, US-China trade war and the US Federal Reserve hiking interest rate for the fourth time in a year were some of the factors that took the toll on India’s economy last year.

So far, the US economy seems to enjoy a good going and 2018 has been another year of strong growth, which is partly due to the tax reform package passed in 2017, leading to forward growth.

But signs of weakening are beginning to show due to its ties with China, especially in relation to the tariffs; partial government shutdown; increasing market volatility; and falling consumer confidence.

According to the Bank of America Corp analysts, President Donald Trump’s trade war with China will cause some real pain for the US economy.

The US national debt has increased by more than $2 trillion dollars since Donald Trump entered the White House, according to figures released by the US Treasury Department.

The data showed the debt stood at $21.974 trillion at the end of 2018, more than $2 trillion higher than when Mr Trump took office.

An analysis by CNN concluded that the debt represented 78 percent of the US’ GDP in the fiscal year 2018, the highest percentage since 1950. The Congressional Budget Office says that the debt could grow to 96 percent of GDP (or $29 trillion) by 2028.