Davos 2020: Kenneth Rogoff Says India Has Potential To Grow 7-8%; Sees China’s Growth At 3% In Next Decade
India and China are set to see divergent growth paths in the coming decade.
That’s according to Kenneth Rogoff, professor of Economics and Public Policy at Harvard University, who said the country’s fundamentals—a young population and fast growing cities—make for an optimistic outlook.
“India has the potential to grow at 7-8 percent for a long time. China does not. India has a young population, it has a lot of potential in its infrastructure, to catch up. China is at the other end of the curve. It is reaching the end of the line,” he told BloombergQuint in an interview on the sidelines of the World Economic Forum at Davos.
The lack of population growth, a shrinking labour force and an overbuilt housing sector means China is most likely to grow at an average of 3 percent for the next decade, Rogoff said.
China’s clearly on a slowing trajectory; long-run growth is going to be much slower than now.Kenneth Rogoff, Professor of Economics and Public Policy, Harvard
The Indian economy, despite its potential, is currently undergoing a severe slowdown in consumption, investment and credit. As a result, gross domestic product growth came in at 4.5 percent for the quarter ended September, the second lowest in the current GDP series. The International Monetary Fund lowered the country’s growth estimate for 2019 to 4.8 percent on the first day of the ongoing World Economic Forum.
When asked what he thought of the economic policies put in place by the Narendra Modi-led government, Rogoff said that growth is not dependent only on economic policies. “There are cycles.”
On Global Growth For The Next Decade
- If we have a recession, the tools are limited.
- Monetary policy can't do too much.
- A more honest phrase for fiscal policy is political intervention, because it's very unpredictable.
- In countries like Australia, there's more support for fiscal intervention, unlike in the U.S.
- In the U.S., Republicans will cut taxes, while Democrats will increase the size of the government.
- If we get de-globalisation, it would not be a good thing.
- De-globalisation could not just slow growth, but it could reverse some of the growth we've seen.
- Don't think de-globalisation will happen, as politicians realise the impact.