India overtook the UK to become the world’s fifth-largest economy on Friday, September 2, according to a Bloomberg report.
India has pushed the UK to sixth place in the last three months of 2021. The latter as the UK grapples with a shrinking economy and a change of leadership following the resignation of Boris Johnson.
Calculations are based on US dollars, and according to International Monetary Fund (IMF) GDP figures, India extended its lead in the first quarter.
Finance Minister Nirmala Sitharaman said on Twitter: Ten years ago, India was the largest economy and she ranked 11th, while the UK was her 5th. “
Union Health Minister Mansuf Mandaviya said on Twitter that India was writing a new page of success.
“With the motto of Reform, Do and Transform, New India is writing a new page of success and moving rapidly forward to become an economic powerhouse,” he said.
Business mogul Anand Mahindra also praised the development on Twitter.
India’s economy is estimated to grow by more than 7% this year. Indian stocks soared to number two in the MSCI Emerging Markets Index this quarter, trailing China at number one.
Taking into account the relevant quarter-end dollar exchange rates, India’s economy was $854.7 billion in the quarter to March, while the UK’s was $816 billion. These calculations were made using historical exchange rates from the Bloomberg terminal and the IMF database.
UK GDP grew by only 1% in cash terms in the second quarter, contracting by 0.1% when adjusted for inflation.
The UK is now facing the fastest inflation in 40 years, with rising risks of a recession that could last until 2024, the Bank of England said.
Amid this difficult economic situation, the UK is due to elect a new prime minister on Monday 5 September. Members of the Conservative Party are set to choose Boris Johnson’s successor, and Foreign Minister Liz Truss is expected to beat former Finance Minister Rishi Sunak in polls.