India Overtakes UK as World’s 5th Largest Economy Based on IMF Data CryptoBlog

India is now the world’s fifth largest economy after overtaking the United Kingdom, according to the latest data from the International Monetary Fund (IMF). India’s former chief economic adviser expects the country to become the world’s third largest economy by 2028-30.

India becomes the 5th largest economy in the world

India overtook the United Kingdom to become the fifth largest economy, Bloomberg reported on Friday, citing IMF GDP data and historical exchange rates. According to this estimate, the former British colony overtook the United Kingdom in the last quarter of 2021 and is now behind only the United States, China, Japan and Germany in terms of the size of its economy. Ten years ago, India was the 11th largest.

“On an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of the Indian economy in ‘nominal’ cash terms in the quarter to March was $854.7 billion. On the same basis, the UK was $816 billion,” the publication explained.

Many people in India are welcoming the news of the Indian economy overtaking the British economy. Kartik Sharma, Member of Indian Parliament, tweeted: “India is emerging as the 5th largest economy in the world, toppling the UK from its position. Under the development-oriented leadership of Honorable Prime Minister Narendra Modi Ji, we have made India the 5th largest economy in the world.

Dr Arvind Virmani, former chief economic adviser to the Indian government, expects India to become the world’s third-largest economy in this decade, based on current figures. Virmani was appointed India’s representative to the IMF in 2009. Commenting on the news, he told ANI news agency:

Last year we were 6th with around 40 billion and this was expected to happen in 2022. India is ramping up and in forecast value we will become 3rd by 2028-30.

The IMF’s World Economic Outlook database shows India overtaking the UK in dollar terms on an annual basis this year with a GDP of $3.53 trillion from $3.38 trillion United Kingdom dollars.

Kotak Mahindra Bank CEO Uday Kotak, however, tweeted explaining that India has a population 20 times that of the UK, so its GDP per capita is lower. “Proud moment for India to make the UK, our colonial ruler, the 5th largest economy,” he wrote, adding that “a reality check of the denominator of population: India: 1 .4 billion versus the UK’s 0.068 billion. Therefore GDP per capita is $2,500 versus $47,000. We have miles to go.”

According to government data, India’s economy grew 13.5% in the second quarter of this fiscal year, the fastest in the past four quarters, according to the country’s Office for National Statistics (ONS). Meanwhile, UK GDP rose just 1% in cash terms in the second quarter, but fell 0.1% when adjusted for inflation. The British pound has also underperformed the US dollar against the rupee, with the pound falling 8% against the Indian rupee this year.

Last month, Morgan Stanley said India could become Asia’s strongest economy in 2022-23. Global investment bank expects India’s growth to average 7% for 2022-23 “Economy set to perform at its best in over a decade as pent-up demand is unleashed “said the brokerage firm. “Lower corporate taxes, the Production Linked Incentives (PLI) scheme and India as a potential beneficiary of supply chain diversification will catalyze and support domestic demand, especially for investment.”

How do you feel about India overtaking the UK as the world’s fifth largest economy? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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