Indian economy will outshine China in 2016

India will be the star among emerging market economies and is expected to achieve 7.7 percent growth in 2016, overshadowing China, PwC said in a report. India alone will grow faster than its long-term average growth rate in 2016, according to a global consulting firm.

Compared to other emerging economies (China, India, Brazil, Mexico, Russia, Indonesia and Turkey), India will be a star, while Brazilian and Russian economies will contract and China will slow down, the report said.

While the advanced economies of the G7 (US, UK, Japan, Germany, France, Italy and Canada) are expected to grow at a slower pace than their trend rate. “We expect the US recovery could go into a higher gear in 2016, while the UK will continue to pick up consumer demand as well. We should see at least the beginning of the end of the eurozone crisis. 2016 excluding India, ”said PwC UK Chief Economist John Hawksworth.

According to PwC, China's GDP growth will decline to 6.5 percent in 2016, as growth in manufacturing and exports will gradually slow down. The report also noted that India will continue to reap the benefits of recent reforms. "A cut in the Reserve Bank of India's policy from 8 percent to 6.75 percent last year will help support consumption and investment growth this year," PwC said, adding that foreign direct investment will also show results.

The report notes that geopolitics, not economics, will be at the heart of the agenda. The migrant crisis in Europe, the international community's response to the crisis in the Middle East and the referendum on UK membership in the European Union will be major geopolitical issues.

Meanwhile, commodity prices are expected to remain low. "This will be good news for most raw material importers, but a challenge for countries that rely heavily on commodity exports," the PwC report noted.