India is now the world’s fifth-largest economy after surpassing the U.K., the latest data from the International Monetary Fund (IMF) shows. India’s former chief economic advisor expects the country to become the world’s third-largest economy by 2028-30.
India is now the 5th largest economy in the world
India has leaped past the U.K. and become the fifth-biggest economy, Bloomberg reported Friday, citing IMF’s GDP data and historic exchange rates. The estimate states that the ex-British colony has now surpassed the U.K.’s GDP in the third quarter 2021. It is currently behind China, Japan and Germany when it comes to the economy size. India was the eleventh-largest country a decade back.
“On an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of the Indian economy in ‘nominal’ cash terms in the quarter through March was $854.7 billion. On the same basis, the U.K. was $816 billion,” the publication explained.
Indians rejoice at the fact that the Indian economy has overtaken the British. Indian parliament member Kartik Sharma tweeted: “India emerges as the world’s 5th largest economy, overturning the U.K. from its position. Under Hon’ble PM Narendra Modi Ji’s development-oriented leadership, we’ve made India the 5th largest economy in the world.”
Dr. Arvind Virmani, a former chief economic advisor to the government of India, expects India to become the world’s third-largest economy this decade, based on current figures. Virmani was appointed India’s representative to the IMF in 2009. He spoke out to ANI about the developments:
Last year we were 6th by about 40 billion & it was expected to happen in 2022. India is moving up the power scale & by value of forecast we will become 3rd largest by 2028-30.
The IMF’s World Economic Outlook database shows India overtaking the U.K. in dollar terms on an annual basis this year with a GDP of $3.53 trillion compared to the U.K.’s $3.38 trillion.
Uday Kotak (Kotak Mahindra Bank CEO) tweeted that India’s population is 20 times greater than the U.K., so that India’s GDP per capita can be lower. “Proud moment for India to pip the U.K., our colonial ruler, as the 5th largest economy,” he wrote, adding that “a reality check of population denominator: India: 1.4 billion vs U.K. 0.068 billion. Thus, the per capita GDP of India is now $2,500 and not $47,000. We have miles to go.”
According to government data, India’s economy grew by 13.5% in the second quarter of this fiscal year — the fastest in the last four quarters, according to the country’s National Statistical Office (NSO). In the United Kingdom, however, GDP was down 0.1% following inflation adjustment. It grew by just 1% in currency terms. The sterling has underperformed relative to the dollar, falling by 8% this year against the Indian rupee.
Last month, Morgan Stanley said India could emerge as Asia’s strongest economy in 2022-23. The global investment bank expects India’s growth to average 7% for 2022-2023 “The economy is set for its best run in over a decade as pent-up demand is being unleashed,” the brokerage firm said. “Lower corporate taxes, the production-linked incentive (PLI) scheme and India as a potential beneficiary of supply chain diversification will catalyze and sustain domestic demand, especially in investment.”
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