India is likely to become world's third-largest economy by 2029, says SBI

5 Sept 2022 , 11:19 AM

According to a State Bank of India (SBI) research paper, a significant structural change that has occurred since 2014 would likely cause India to surpass China as the third-largest economy in the world by 2029. The analysis indicated that based on India's trajectory since 2014 and its current ranking of 10, the country will likely be the third-largest economy in 2029. In 2014, India was rated 10th.

A growth rate of 6—6.5% is the new standard for the global economy, according to the research, which focused on impending risks. According to the analysis, if growth continues at its current rate, India would certainly exceed Japan by 2029 and Germany by 2027. According to the study, India's proportion of global GDP is currently 3.5%, up from 2.6 % in 2014, and is predicted to reach four percent in 2027, matching Germany's present share.

According to the research, which was written by SBI's head economist Soumya Kanti Ghosh, India would probably gain from China's investment slowdown. According to the paper, broad-based development in empowerment will increase each Indian's income, which might work as a force multiplier for a brighter future.

Furthermore, it stated that with the appropriate policy perspective and realignment in global geopolitics, the present predictions may possibly be revised upward. In light of "the significantly below GDP data for the first quarter," the chief economist recently reduced the full-year growth prediction for FY23 downward to a low 6.8 % from 7.5 % before.

India's first quarter growth figures revealed a consensus increase of 13.5%, which was dragged down by the weak performance of the manufacturing sector, which had a meagre 4.8% growth in the first quarter of FY23, countering the strong performance by the services sector.

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