The Asian Development Bank released a report about it, the World Bank foresaw this happening and the International Monetary Fund expects it. Growth rates in China and India are expected to drop, plummet, fall and reach a new low as international GDP figures fall and domestic corruption charges hurt public sentiment and corporate morale.
According to the IMF, China’s economic growth is expected to weaken to 7.8 percent this year and India’s is expected to grow 4.9 percent this year, down from a forecast in July of 6.1 percent. According to the ADB, the Asian region, China is expected to grow 7.7 percent this year and 8.1 percent in 2013, a sharp drop from 9.3 percent in 2011. India’s growth will also slow to 5.6 percent in 2012, down from 6.5 percent in 2011.
As a result of the depression in the global economy, a 2009 buzzword has once again become popular — decoupling. Economists fear that the fall of the global economy will pull both China and India down. The word which symbolizes that there is still hope for the two neighbours also means that economic soothsayers dread the weight of the West in pulling China and India down. At the height of the financial crisis they spoke of decoupling Asia from the West to protect the economies, that kind of talk has returned.
Reasons for the slump are manifold – both national and international, a ripple effect of global occurrences as well as domestic disruptions. Manufacturing and the services industries which make up nearly half of the regions 2010 GDP have slumped in the past few months. Corruption charges riddled both governments and regulatory barriers created more hurdles for foreign investors to jump over, additionally social unrest meant that progress was stilted and unpredictable.
While debates remain vociferous on how the world economy and India and China in particular can bail themselves out, nobody expects a solution anytime soon. Meetings are being convened, conferences held to erect stop-gap measures to save the economy from plummeting. What needs to seen is whether China and India will continue to have the economic might to bail the global economy out of its doldrums.