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The Economic Times
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INDIA'S RAPID ECONOMIC RISE is making a real difference to world growth. Though in terms of world GDP its share during
2005 was just 1.8 per cent, India's contribution to incremental world development amounted to nearly double that at 3.2 per cent, making it the fourth highest scorer in the world. China, too, is among the foremost participants with an incremental world GDP growth contribution of 9.4 per cent, although its actual share of world GDP is still only half that at 4.3 per cent.
These findings are revealed in the latest study of the Economic Times Intelligence Group, the think tank of The Economic Times daily newspaper.
By the same yardstick, the performance of the rich nations has fallen back. Thus, the United States with a world GDP share of 28.7 per cent could manage last year to boost world GDP by only an incremental 21.6 per cent. In the case of Japan the figures fell to 11.3 per cent and 6.4 per cent, Germany 6.6 per cent and 2.5 per cent, United Kingdom 5.2 per cent and 2.2 per cent and France 4.8 per cent and 1.4 per cent.
The study computed the absolute global GDPs and the global incremental GDPs separately. The first measured the size of an individual economy in relation to the world economy and the second the incremental growth of an individual ecomony in relation to the incremental growth of the world.
South East Asia and Africa have also done better than the developed world, which may suggest a new trend in development. But there are imponderables that can lead to reverses. Oil price spirals, for example, or interest rate hikes could turn back growth. Or if the bubble like that of housing in the U.S. does break, leading to a curtailment of consumption, the effects may be unsettling on the world.
Published: April 01, 2006