Intellectual Thoughts by Sanjay Panda: India likely to become third biggest economy by FY28

India likely to become third biggest economy by FY28


India likely to become the third-biggest economy behind the US and China by FY28, two years earlier than initially expected, overtaking Germany and Japan, according to the International Monetary Fund (IMF) World Economic Outlook database.

India overtook UK to became the 5th largest economy this year.

India's GDP would match Germany's in size to become the fourth-largest by 2025–2026.

The World Economic Outlook of the International Monetary Fund (IMF) predicts that it will surpass Japan in growth and move up to the third-largest position by 2027-28 (FY28). 


India’s rapid progress…

  • Most developed economies hit hard by pandemic and war-triggered inflation
  • They will grow marginally or even go into recession
  • India’s growth also took a knock but economy expected to expand at good pace
  • Rupee has depreciated less than many currencies against the dollar

…but not just relative out performance

  • India has sound macro fundamentals.
  • Inflation high,but is not skyrocketing.
  • Current account deficit high but expected to moderate 
  • Forex reserves down but still at nearly $550 b Fiscal situation is comfortable 
  • Banks are in a strong position and credit cycle is picking up 

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