When India’s GDP briefly exceeded China’s

Did you know that India surpassed China in terms of gross domestic product (GDP) some three decades ago? A visual representation of economic data by multi-lateral lender World Bank shows a dramatic historic moment for India back in the late 1980s!

According to the infographic, India’s economy briefly outgrew its neighbour's after a gradual — and dramatic — narrowing of the gap between the two since the early 1980s. 

The World Bank compiled data from 1960 to 2022 for comparison, dividing the period into distinct events, including China's cultural revolution from 1966 to 1977, India's economic reforms beginning 1991, the 2008 Global Financial Crisis, and the global coronavirus pandemic in 2020. 

(A screenshot from the World Bank's visualisation capturing the period in 1988 when India briefly surpassed China in terms of GDP)

Prior to 1988, the economies of the two nations came in neck-and-neck distance earlier in the mid-1960s, according to the data.

Separate data from the World Bank, accessed by Zeebiz.com, showed economic growth averaged 9.03 per cent in China and 6.38 per cent in India from 1988 to 2020. 

China began its crucial reforms in 1978 under Deng Xiaoping, which would eventually take the country among the top five economies over the next three decades, and eventually to the No. 2 spot in 2010. 

The brief period in 1988 when India’s economy was larger than China’s was about five years after each entered the $200-billion club. The milestone came about even a good three years before the historic economic liberalisation drive led by the PV Narsimha Rao government in India to rescue the country from severe economic crisis amid mounting external debt. 

(A screenshot capturing the entire period, from 1988 to 2022, covered in the World Bank clip)

What next?

In June, the World Bank cut its 2024 global forecast while lifting its outlook for the current year, stating that the US, China, and other major economies have proven to be more resilient than thought earlier but added that higher interest rates and tighter credit will take a bigger toll in 2024. 

The World Bank projects the real global GDP to expand 2.1 per cent in 2023 — a full percentage point less than 2022 — and 2.4 per cent in 2024, as of its June estimates. 
It expects a pronounced deceleration in advanced economies and the impact of monetary tightening for many major economies this year, according to its June projections.

The World Bank pegs GDP growth for India and China in 2023-2024 at 6.3 per cent and 4.6 per cent, respectively.

In the first three months of 2023, India's GDP growth stood at 6.1 per cent better than China's 4.5 per cent, though its fastest in a year.  

While official quarterly data on India’s GDP for the quarter ended June is due at the end of August, its neighbouring economy expanded 6.3 per cent for the three-month period.