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After showing economic growth of 8.9 percent, its highest rate in 18 years, India is expected to overtake South Korea to become Asia's third largest economy, after China and Japan.
The International Monetary Fund announced Thursday that India's growth rate from April 2006 to March 2007 would hit 8.9 percent. Its GDP will reach US$840 billion, surpassing Korea¡¯s estimated GDP of $826.9 billion for 2006. Until last year, India was at 12th place in world rankings, one step lower than Korea.
Rapidly developing Russia expects its GDP to jump from $763.3 billion in 2005 to $975 billion in 2006 thanks to booming oil prices. The IMF expects Russia to beat Korea as well.
With GDP of $780 billion, Korea has been one of the top ten economies, ranking along with Brazil, India and Mexico with GDPs of $795 billion, $770 billion and $760 billion, respectively. With Russia and India recording such strong growth, Korea is expected to drop out of the top 12.
Meanwhile, India's Central Statistics Office announced that its GDP for the 2006 financial year will be $854 billion, a 9.2 percent increase from the previous year. The prediction is slightly higher than the IMF's forecast. India's rapid growth comes from service industries like software programming and rising production in the manufacturing sector after a few years of stagnation. Manufacturing production grew by 11.3 percent from growth of 9.1 percent last year.
Meanwhile, there are concerns that India's economy is overheating and that inflation is on the rise. The Economist business magazine said in its latest issue that while the country neglects essential factors for long-term growth such as public reform and infrastructure, price rates are rising 6 percent a year, double the inflation rate in China. High-flying India, the article warned, may be at risk of a hard landing.
(englishnews@chosun.com )
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