India, which seems to have been pushed back to being the world’s sixth biggest economy in 2020 because of the novel coronavirus pandemic, will again overtake the United Kingdom to turn the fifth largest in 2025 and race to the third spot by 2030, the Centre for Economics and Business Research (CEBR) said in its annual report released recently.
The UK-based think tank forecast that the Indian economy will expand by 9 per cent in 2021 and by 7 per cent in 2022.
India had overtaken the United Kingdom in 2019 to become the fifth largest economy in the world. The UK appears to have overtaken India again during 2020 as a result of the weakness of the rupee, it said.
“Growth will naturally slow as India becomes more economically developed, with the annual GDP growth expected to sink to 5.8 per cent in 2035,” a news agency reported quoting the document.
“This growth trajectory will see India become the world’s third largest economy by 2030, overtaking the UK in 2025, Germany in 2027 and Japan in 2030,” it said.
CEBR said India’s economy had been losing momentum even ahead of the shock delivered by the COVID-19 crisis.
The rate of GDP growth sank to a more than ten-year low of 4.2 per cent in 2019, down from6.1 per cent the previous year and around half the 8.3 per cent growth rate recorded in 2016.
“Slowing growth has been a consequence of a confluence of factors including fragility in the banking system, adjustment to reforms and a deceleration of global trade,” it said.
China will in 2028 overtake the United States to become the world’s biggest economy, five years earlier than previously estimated due to the contrasting recoveries of the two countries from the COVID-19 pandemic, it forecast.
Japan would remain the world’s third-biggest economy, in dollar terms, until the early 2030s when it would be overtaken by India, pushing Germany down from fourth to fifth.
“The pace of the economic recovery will be inextricably linked to the development of the COVID-19 pandemic, both domestically and internationally,” it said.
“The infrastructure bottlenecks that exist in India mean that investment in this area has the potential to unlock significant productivity gains. Therefore, the outlook for the economy going forwards will be closely related to the government’s approach to infrastructure spending,” the annual report added.
