Indian, Chinese economies to accelerate in Q4

New Delhi: India and China are projected to see accelerated economic growth in the fourth quarter of this year, bucking trends in the US and the European Union, according to a report.

The Economist Intelligence Unit on Wednesday said it expects third-quarter GDP growth to be weak across most of the world's biggest economies. "Of the G7 and BRICS economies, only India and the UK are expected to post third-quarter results that show an acceleration from the second quarter.

In the case of the UK, however, there is limited cause for celebration, as this only represents a recovery from a disastrous second quarter," it said in a release providing excerpts of a report.

In the third quarter, India's real GDP growth is estimated to be 1 per cent on a quarter-on-quarter basis and is projected to rise to 2.20 per cent in the fourth quarter, as per the report. According to the report, Canada and the US would be the fastest-growing G7 economies in the third quarter, with growth expected to come in at 0.4 per cent.

"Indian and Chinese economies set to accelerate in Q4, bucking trends in the US and EU," the release said. The report noted that buffeted by the US-China trade war, a shrinking workforce and a leveraged banking sector, Chinese economic growth slowed to 1.35 per cent in the second quarter.

The slowdown should continue into the third quarter but in the fourth quarter and in the first quarter of next year, "we forecast a pick-up in growth to 1.6-1.8 per cent as government stimulus kicks in and policies to boost the labour market and household impact are announced," it added.

Noting that the US economy is showing signs of strain, the report said that consumer sentiment has softened as trade tariffs have become a greater cause for concern. "We expect the US to continue to slow in the fourth quarter and to post an annual result of 2.2 per cent for 2019 and just 1.6 per cent in 2020," it said.