London/New Delhi: According to IMF projections, India will overtake the UK to become the world’s fifth largest economy, just behind the US, China, Japan and Germany. Ten years ago, India ranked her 11th among the economic powerhouses, and the UK was her fifth. Britain trails India to become the world’s sixth-largest economy, dealing a further blow to London’s government as it grapples with a brutal cost of living shock.
The assumption that India will overtake the UK is based on calculations by Bloomberg using historical exchange rates from the IMF database and terminals. “On an adjusted basis, using the relevant quarter-end dollar exchange rate, the size of the Indian economy in ‘nominal’ cash equivalents for the quarter to March was $854.7 billion, he said. By the same standards, the UK was her $816 billion,” said the Bloomberg report.
The former British colony has surpassed the United Kingdom in the last three months of 2021 to become the fifth largest economy. Calculations are based on US dollars, and according to International Monetary Fund GDP figures, India extended its lead in the first quarter. Britain’s decline in international rankings is an unwelcome backdrop for the new prime minister. Members of the Conservative Party will choose Boris Johnson’s successor on Monday, with Foreign Minister Liz Truss expected to defeat former Finance Minister Rishi Sunak in a runoff vote.
The winner will inherit the country facing the fastest inflation in 40 years and the risk of a recession that the Bank of England says could last until 2024. By contrast, the Indian economy is projected to grow by more than 7% this year. A global rebound in Indian stocks this quarter lifted him to his second spot on the MSCI Emerging Markets Index, putting him second only to China.
India’s lead over the UK will widen in the coming years as India is the world’s fastest growing major economy. India’s GDP expanded by 13.5% in the April-June quarter, the fastest-growing economy for the year, and remained the fastest-growing economy tag in the world, although rising interest costs and a major The looming threat of a global economic recession could dampen momentum in the coming quarters. .
Official data released earlier this week showed gross domestic product (GDP) growing 13.5% year-on-year, matching 20.1% growth in the previous year and 4.09% growth in the three months to March. increase.
Although lower than the Reserve Bank of India’s (RBI) forecast of 16.2%, this growth rate is driven by consumption, indicating a rebound in domestic demand, especially in the services sector. Stuck demand is driving spending as consumers head out and spend more after his two years of pandemic restrictions. The service sector is showing a strong recovery and should get a boost from next month’s festival season. However, manufacturing growth is slowing to his 4.8% is a cause for concern. Another concern is that imports are exceeding exports. -agency