India to be fastest growing economy by 2018: Economist

New Delhi, March 16 : India is the second largest growing economy after China, but it will overtake its neighbouring country by 2018, the Economist Intelligence Unit (EIU), the research arm of London-based Economist magazine, said Tuesday.

"We forecast that India will overtake China as the fastest growing major economy by 2018. We expect India's growth on an average of eight percent in the next five years," EIU senior analyst Anjalika Bardalai told reporters on the sidelines of 14th Business Roundtable here.

She said the Indian economy would grow at 6.8 percent during the current fiscal, at 7.7 percent in 2010-11, and 8 percent the year later.

But the statistical arm of the Indian government, the Central Statistical Organisation, has projected the economy to grow by 7.2 percent in the current fiscal.

"Our growth projection is based on expenditures in the economy and is not based on factor cost as done by the Indian government," Bardalai explained.

The Indian government measures growth on the basis of factor cost. Factor cost is the cost of factors of production used to produce final goods and services.

India's GDP during the three quarters in the current fiscal grew at 6.1 percent, 7.9 percent and 6 percent. While during 2008-09 it grew at 6.7 percent and in 2007-08 at 9.1 percent.

"The GDP will not return back to 9 percent and more as it was during 2005-08. Also the monetary pressure may not go down as expected," The Economist executive editor Daniel Franklin said.

Driven by increasing food prices, India's annual rate of inflation, based on the wholesale price index, rose to 9.89 percent in February from 8.56 percent in the previous month, according to an official data revealed Monday.

It also predicted inflow of investments through Foreign Institutional Investors (FII) at USD 75 billion by 2014.