Wednesday, July 24, 2024

“India would be world’s third biggest economy by 2027”

In a massive development on Tuesday, Morgan Stanley’s chief Asia economist Chetan Ahya predicted that India will be the world’s third-largest economy by 2027. Writing an OpEd in Financial Times, he forecasted that the country’s GDP will more than double from the current $3.4 trillion to $8.5 trillion over the next 10 years. Mentioning that India will add $400 billion to its GDP per year, the economist attributed his predictions to the shift in India’s domestic policy from redistribution to boosting investment and job creation. 

To buttress his point, he highlighted that the Centre introduced the Goods and Services Tax (GST), corporate tax cuts and production-linked schemes that encourage investment. Ahya hailed the Centre’s efforts to attract investment for boosting manufacturing exports which he asserted would result in more formal sector employment and create a cycle of sustained growth. Pointing out that India’s working-age population is growing, he also projected that India will outperform China in terms of real GDP growth. Lauding India’s digitalization push, he averred that the nation is set to drive a fifth of global growth in the coming decade. 

Earlier in October, the International Monetary Fund (IMF) projected that India will be the fastest-growing large economy in the world. Despite cutting India’s GDP growth forecast to 6.8% for the Fiscal Year 2022-23, the IMF predicted that India will continue to remain on track to become one of the fastest-growing economies in the world. In the first quarter of FY2023, the country’s GDP grew by 13.5% owing to better performance by the agriculture and service sectors. This came amid the geopolitical crisis arising out of the Ukraine-Russia war and rising inflation. 

The National Statistics Office will release the GDP data for the July-September quarter on November 30. Speaking at the second edition of Republic’s India Economic Summit in October, Union Commerce & Industry Minister Piyush Goyal predicted that India will become a $30 trillion economy in 2047 when the country celebrates 100 years of independence. He observed, “India continues to lead economic growth and in fact is expected in the next few decades, possibly the century, to become the engine of global growth”. 

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