India set to become 5th largest economy by 2025
By 2025, India will overtake Britain to become the fifth largest economy in the world and will reach the third position by 2030
New Delhi: By 2025, India will overtake Britain to become the fifth largest economy in the world and will reach the third position by 2030.
India is one of the worst-affected countries due to coronavirus but it'll become the world's fifth-largest economy by 2025 and the third-largest by 2030 after overtaking the UK in 2025, said the UK-based think tank - Centre for Economics and Business Research (CEBR). India will surpass Germany in terms of GDP by 2027 and Japan by 2030, it said.
India had overtaken the UK in 2019 to become the fifth largest economy in the world but has been relegated to the 6th spot in 2020.
"India has been knocked off course somewhat through the impact of the pandemic pushing it down by one spot. However, by 2024 India will take over the fifth spot again," the CEBR said in an annual report published on Saturday.
CEBR's estimate suggests India's GDP per capita in 2020 was $6,284, making it a lower-middle-income country.
It said though Covid-19 delivered a major blow to the Indian economy, it was losing momentum even ahead of the pandemic due to fragile banking system, adjustment to reforms and deceleration of global trade. "The rate of GDP growth sank to a more than 10-year low of 4.2 per cent in 2019, down from 6.1 per cent the previous year and around half the 8.3 per cent growth rate in 2016."
Notably, India is the second-worst affected country after the US when it comes to Covid-19. So far, over 1.4 lakh people have already died with a total caseload of over 1 crore.
However, it equates to around 10 deaths per 100,000, significantly lower figure than much of Europe and the Americas. As Covid-19-induced lockdowns stopped most economic activities in India, it' April-June quarter GDP took a massive hit of 23.9 per cent below its 2019 level.
The economic shock was so strong 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. Only the agricultural sector, buoyed by a bountiful harvest, remained largely unaffected and emerged as an important driver of India's economic recovery.
As restrictions were gradually lifted, many parts of the economy were able to spring back into action, although output remains well below pre-pandemic levels. India recorded a GDP contraction of 7.5 per cent in Q2.