According to the latest report by Harvard University, India tops the list of the fastest growing economies in the world for the coming decade and is projected to grow at 7.9 per cent annually, ahead of even China and the United States.
The Centre for International Development at Harvard University (CID) stated in its new growth projections that countries that have diversified their economies into more complex sectors, like India and Vietnam, are those that will grow the fastest in the coming decade.
• The report stated that India tops the list as the fastest growing country for the coming decade, at 7.9 per cent annually, in the economic complexity growth projections.
• It said that India has made progress in diversifying its export base to include more complex sectors such as chemicals, vehicles and certain electronics.
• It said that India's productive capabilities exceed expectations for its current income level, which contributes to the projection of rapid growth for the coming decade.
• The researchers also found that India ranks the best on the criteria termed as the Complexity Opportunity Index (COI), which measures how easy it is to redeploy existing knowledge to enter new complex products.
• The report stated that India's existing capabilities have not only diversified its exports, but also allow for easy redeployment into related products that depend on those capabilities, making further diversification relatively easy.
India’s top rank in the index means that the nation has many unrealised opportunities to diversify into related, high-value sectors to continue to drive productivity growth and job creation.
The projected growth rate of other countries
• While China is projected to grow at 4.9 per cent annually to 2026, the United States is expected to grow at 3 per cent and France at 3.5 per cent.
• Uganda comes second on the list of the fastest-growing economies to 2026, predicted to grow at 7.5 per cent annually.
• In sub-Saharan Africa, growth is expected to shift eastward from commodity-driven West Africa to East Africa, with Uganda, Tanzania (4th), and Kenya (10th) in the top 10 predicted fastest growing countries globally for the coming decade.
• On the other hand, the study revealed that many low-income countries, including Bangladesh, Venezuela and Angola have failed to diversify their capabilities and face low growth prospects in the coming decade.
The growth projections are based on economic complexity, a single measure of each country's economy that captures the diversity and sophistication of the productive capabilities embedded in a country's exports.