Table of Contents
The News
- Data from the IMF shows India has risen to become the world’s fifth largest economy, when ranked by nominal GDP.
- According to data from the IMF’s October World Economic Outlook – India, when ranked by nominal GDP, overtook France and the UK in 2019.
- India’s economy – GDP of USD 2.94 trillion,
Reports by IMF
- Global Financial Stability Report
- World Economic Outlook
Reports by World Bank
- Ease of Doing Business
- World Development Report
GDP PPP
- India’s GDP (PPP) is USD 10.51 trillion, exceeding that of Japan and Germany.
- India’s GDP is 3rd in purchasing power parity (PPP) terms.
- Due to India’s high population, India’s
GDP per capita is USD 2,170
- (for comparison, the US is USD 62,794).
- The country’s GDP growth has been among the highest in the world in the past decade – regularly achieving annual growth of between 6-7%.
- This rapid rise has been fuelled by a number of factors, according to a 2016 McKinsey Global Institute report, including urbanization and technologies that have improved efficiency and productivity.
- India’s real GDP, however, a measure that accounts for inflation, is forecast to slow in the year ahead thanks to credit weaknesses.
- India’s real GDP growth, however, it said is expected to weaken for the third straight year from 7.5 per cent to 5 per cent.
Govt data on Indian Economy
- 7.4% average growth clocked during 2014-19 with inflation averaging around 4.5%.
- 271 million people raised out of poverty during 2006-16.
- FDI elevated to US$ 284 billion during 2014-19 from US$ 190 billion during 2009-14.
- United States
- S. Nominal GDP: $21.44 trillion
- S. GDP (PPP): $21.44 trillion
- The U.S. has retained its position of being the world’s largest economy since 1871.
- China
- China Nominal GDP: $14.14 trillion
- China GDP (PPP): $27.31 trillion
- When the economies are assessed in terms of purchasing power parity, the U.S. loses its top spot to its close competitor China.
- In 2019, the U.S. economy, in terms of GDP (PPP), was at $21.44 trillion, while the Chinese economy was measured at $27.31 trillion.
- Japan
- Japan Nominal GDP: $5.15 trillion
- Japan GDP (PPP): $5.75 trillion
- Japan’s economy crossed the $5 trillion mark in 2019.
- Germany
- Germany Nominal GDP: $3.86 trillion
- Germany GDP (PPP): $4.44 trillion
- India
- India Nominal GDP: $2.94 trillion
- India GDP (PPP): $10.51 trillion
- The Indian economy was just $189.438 billion in 1980, ranking 13th on the list globally.
- India’s rise is even more dramatic across the past 25 years.
- Since 1995, the country’s nominal GDP has jumped more than 700%.
Slowdown?
- In India, growth softened in 2019 as corporate and environmental regulatory uncertainty, together with concerns about the health of the nonbank financial sector, weighed on demand.
- The strengthening of growth in 2020 in India as well as for developing nations (which in some cases entails continued contraction, but at a less severe pace) is the driving factor behind the forecast of an eventual global pickup.
Challenges
- Despite its strong economic growth, the country still faces its share of challenges.
- Access to development and new opportunities has been uneven, says the World Bank, varying by geographic location.
- Furthermore, India remains home to one quarter of the world’s poor.
- Just 39% of its rural residents can access sanitation facilities according to the UN.
- Still, significant progress has been made.
- Poverty reduction rates are among the highest in the world, with more than 160 million fewer people living in extreme poverty in 2000 compared to 2015.
Future?
- India is expected to become the fourth largest economy by 2026 and the third largest by 2034, according to a report by UK-based Centre for Economics and Business Research (CEBR).
- The CEBR report states that India would surpass Germany to take on the mantle in 2026 and further topple Japan in 2034 to become the third largest economy.
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