Home   australia  

why India's gdp growth rate is much higher than developed countries like Australia

In 2022, Australia's GDP growth rate was 3.62% while that of India was 7%. So you can see that India is growing by huge margin as compared to Australia. The difference in economic growth rates between India and Australia can be attributed to several key factors.

  1. Economic Structure: India and Australia have different economic structures. India has a large population and a growing workforce, which can contribute to higher potential economic growth rates. More than 1.4 billion people (40x times more than Australia) live in India whereas 25 million people live in entire Australia. Additionally, India has a relatively lower base of development compared to Australia, which allows for faster catch-up growth.

  2. Population Growth: India has a rapidly growing population, which can contribute to higher consumption, investment, and economic activity. Australia, on the other hand, has a smaller population, which can impact the overall scale of economic growth.

  3. Industry Composition: The industries that drive each country's economy can impact growth rates. India has a diverse economy with a strong services sector, information technology, and manufacturing. Australia's economy is heavily reliant on commodities, such as mining and agriculture, which can be subject to fluctuations in global demand and prices.

  4. Global Trade: Australia is a significant exporter of commodities like iron ore, coal, and natural gas. Fluctuations in global commodity prices can influence Australia's economic growth. India's economy is more diversified and less dependent on commodity exports.

  5. Monetary and Fiscal Policies: Government policies, including monetary policy (controlled by central banks) and fiscal policy (government spending and taxation), can influence economic growth. Differences in policy choices and effectiveness can impact growth rates.

  6. Infrastructure and Development: India is still developing its infrastructure and expanding its industrial base, which can lead to higher growth rates. Construction of Highways, Airports, Metros, Railways is in full swing in India. Australia, as a more developed economy, may experience slower growth due to the maturity of its industries.

  7. Global Economic Conditions: Global economic conditions and geopolitical factors can affect both India and Australia differently. Trade relationships, geopolitical stability, and global economic trends can impact each country's growth trajectory.

Published on: Aug 13, 2023, 05:49 AM  


Add your comment