India will overtake the United Kingdom to become the world’s fifth-largest economy in 2025 and replace Japan on the third spot by 2030, PTI reported on Saturday, citing a report by the Centre for Economics and Business Research.
India had replaced the UK on the fifth rank in 2019 too, but was pushed down to the sixth spot in 2020. “India has been knocked off course somewhat through the impact of the pandemic,” the report by the UK-based think-tank said. It said the UK raced ahead of India because of the rupee’s weakness.
The think-tank projected that the Indian economy will grow by 9% in 2021 and 7% in 2022. “Growth will naturally slow as India becomes more economically developed, with the annual GDP [gross domestic product] growth expected to sink to 5.8% in 2035,” it said. “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.
The report that the coronavirus crisis had been a “human and an economic catastrophe” for India. “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,” the report said.
The think-tank stated that India’s agricultural sector was the driving force behind the country’s recovery.
The report added that India manufactured majority of the world’s vaccines and had 42-year-old vaccination programme, which put it in a better position than other developing countries to roll out a coronavirus vaccine in 2021.
The think-tank also projected that China will replace the United States as the world’s biggest economy in 2028, five years earlier than expected, according to Reuters.
India’s Gross Domestic Product growth rate contracted by 7.5% for the second quarter (July-September) of the current financial year, government data showed. With this, the country’s economy slipped into a technical recessionary phase for the first time ever – when its GDP growth is negative or declining for two consecutive quarters or more.
India’s economy had contracted by an unprecedented 23.9% in the first quarter (April-June) of this financial year, after being hit by the coronavirus pandemic and the subsequent economic slowdown. Several international agencies have also cut India’s growth forecasts.