October 25th, 2011
04:45 AM GMT
Hong Kong (CNN) – India is expected to overtake fellow Asian powerhouse China in terms of GDP growth in 2013, according to a new report from Ernst and Young.
India is forecast to achieve 9.5% growth, compared with China’s expected 9%.
Both countries remain among the top performers in the group of 25 so called Rapid Growth Markets (RGMs), which also includes Brazil and Russia.
The report, which is based on the Oxford Economics Growth Model and offers insight on macroeconomic trends across these fast-growing markets, attributes China and India’s relative resilience in the face of global economic turmoil to their large domestic markets and low oil and commodity prices .
But it cautions that inflation, which rose to 10.9% in India in August, needs to be reined in.
“Once inflation is in check, and interest rates are no longer rising, consumers will be more willing to spend, supporting a general improvement in the business environment, with growth steadily accelerating during 2012,” the report said.
The report also warns of a grim future in the aftermath of a potential European recession if the Eurozone debt crisis is not resolved.
Average GDP growth among RGMs would stagnate to 3.2% in 2013, the report predicts, almost half of the current 6.2% estimate for the same year.
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