Chennai: India is likely to overtake the United States and become the second-largest economy in the world by 2030, reports have stated. The country currently sits sixth, closing on the heels of United Kingdom which is in fifth spot at the moment.
According to Standard Chartered Plc, India will be beaten in the race to the top as China will take the honours, dislodging the US, which will fall to third on the list behind the two Asian giants.
Indonesia is predicted to vault into the fourth slot while Turkey will round out the top five.
“Our long-term growth forecasts are underpinned by one key principle: countries’ share of world GDP should eventually converge with their share of the world’s population, driven by the convergence of per-capita GDP between advanced and emerging economies,” Standard Chartered economists led by David Mann wrote in a note.
As per the economists, India is projected to accelerate to 7.8 per cent by the 2020s while China’s will moderate to five per cent by 2030 reflecting a natural slowdown given the economy’s size.
The firm also predicted that the new global order will see current emerging markets occupy seven of the top 10 spots.
Among other findings by the economists of Standard Chartered, it was found that in the emerging markets, the waning reform momentum weighs on productivity growth; with a majority of the world’s population entering the middle-class income group by 2020, it is at a tipping point; the effects of the rapid population aging trend of China and many economies will be countered by the middle-class driven by urbanization and education.
It must be noted that growth among advanced economies is forecast to drop to two per cent this year. Slowing external demand, rising borrowing costs, and persistent policy uncertainties are expected to weigh on the outlook for emerging market and developing economies. Growth for this group is anticipated to hold steady at a weaker-than-expected 4.2 per cent this year.
However, of all the regional blocs, South Asia is expected to accelerate to a growth of 7.1 per cent, underpinned by strengthening investment and robust consumption, with much of the contribution coming in from India.
| To be fastest |
| The World Bank has forecast that India will continue to remain the fastest growing major economy in the world in 2018-19. In a report that was released recently, the World Bank said India’s Gross domestic Product (GDP) will grow at 7.3 per cent during the ongoing financial year. In comparison, China is expected to register a much lower growth rate of 6.3 per cent in 2018-19.
These predictions have been made in a report prepared by the World Bank titled: ‘Global Economic Prospects: Darkening Skies’. The report says that most world economies stare at dark times in this financial year. On the Narendra Modi government’s decision to implement the Goods and Services Tax (GST), the World Bank report said, “In India the recent introduction of a GST and steps toward demonetisation are expected to encourage a shift from the informal to the formal sector.” |