Even though global headwinds continue to add to the inflation woes among other things, India is set to make a mark in the next 5 years. While it missed becoming the fifth largest economy by $10 billion in 2021-22, it will surpass the UK, Germany and Japan to be the third largest economy by 2027-28.
To earn the tag of fifth largest economy, India will have to wait a year till 2022-23 when it will overtake the UK by $27 billion. By FY26, the Indian economy would equal Germany’s to be the fourth-largest. The size of the Indian economy would be $4.94 trillion by FY27. Two years later in FY28, it will become the third-largest. The International Monetary Fund’s (IMF’s) World Economic Outlook has forecasted India to grow bigger than Japan.
The following year, India’s economy would hit the $5.36-trillion mark, higher than Japan’s at $5.17 trillion and it would be when India would become the third-largest economy.
The size of India’s economy was $3.18 trillion in 2021-22 (FY22), while Britain’s was $3.19 trillion in 2021, according to the IMF’s publication, quoted by Business Standard.
It must be mentioned here that the size of India’s economy is calculated on a financial year basis i. e. April to March while it is measured on a calendar year basis for other economies.
Recently, a Bloomberg report had shown that India has rolled past the UK in Q4 of FY22, citing World Bank data. However, that comparison was made on quarterly figures, not yearly. IMF data predicts that India would become a $3.47-trillion economy, while the UK would be $3.2 trillion in the current financial year (2022-23).
Further, the IMF projections indicate that India has been the third-largest economy on purchasing power parity PPP terms for quite some time and it will continue to be so until FY28. PPP takes into account the cost of living in a country while converting a currency into dollars.
