- India, which appears to have been pushed back to being the world’s sixth-biggest economy in 2020, will again overtake the U.K. to become the fifth-largest in 2025 and race to the third spot by 2030, a think tank said.
- India had overtaken the U.K. in 2019 to become the fifth-largest economy.
- “India has been knocked off course somewhat through the impact of the pandemic. As a result, after overtaking the U.K. in 2019, the U.K. overtakes India again in this year’s forecasts and stays ahead till 2024 before India takes over again,” the Centre for Economics and Business Research (CEBR) said in an annual report.
- The U.K. appears to have overtaken India again during 2020 as a result of the weakness of the rupee, it said. CEBR forecast that the Indian economy would expand by 9% in 2021 and by 7% in 2022. “Growth will naturally slow as India becomes more economically developed, with annual GDP growth expected to sink to 5.8% in 2035.”
- Indian would overtake “Germany in 2027 and Japan in 2030,” it said.
- The U.K.-based think tank forecast that China would overtake the U.S. to become the world’s biggest economy in 2028, five years earlier than estimated due to the contrasting recoveries of the two countries from the pandemic.
- Previously, India had overtaken the UK in 2019 to become the fifth largest economy in the world but has been relegated to 6th spot in 2020.
- The five economies ahead are the United States, China, Japan, Germany and the United Kingdom respectively.
- India’s economy had been losing momentum even ahead of the shock delivered by the Covid-19 crisis.
- The rate of Gross Domestic Product (GDP) growth sank to a more than ten-year low of 4.2% in 2019.
- Slowing growth has been a consequence of a confluence of factors including fragility in the banking system, adjustment to reforms (Demonetisation, GST) and a deceleration of global trade.
- GDP in Q2 (April-June) 2020 was 23.9% below its 2019 level, indicating that nearly a quarter of the country’s economic activity was wiped out by the drying up of global demand and the collapse of domestic demand that accompanied the series of strict national lockdowns.
About Center for Business and Economic Research (CBER)
- The Center for Business and Economic Research (CBER), formerly the Bureau of Business Research, is an economic policy and forecasting research center housed within the Miller College of Business at Ball State University in Muncie, Indiana, USA. CBER research encompasses health care, public finance, regional economics, transportation, and energy sector studies.
- In addition to research, CBER serves as the forecasting element in the Muncie area – hosting five state and federal economic forecasting roundtables.
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