India will become the third largest economy by FY28, two years earlier than projected, said SBI Research economists in a note. SBI economists said India will likely grow 8.1% in the first quarter of FY24, pushing the overall growth rate to 6.5%. India recorded a 13.5% growth in the first quarter of FY23. The forecast aligns with RBI projections of 6.5% growth in FY24 but is more optimistic than the International Monetary Fund’s revised forecast of 6.1%. Earlier this week, the IMF revised its growth forecast upwards by 0.2 percentage points on the back of strong domestic investment.
Overview of the News
- SBI economists said that India needs to log 11-11.5% nominal growth annually to achieve this goal, which is achievable with 6.5-7% growth. “We believe that in a world that is ravaged by uncertainties, 6.5-7% growth is the new normal,” they said.
- The researchers said that the current estimates may undergo an upward revision with the right policy perspective and realignment in global geopolitics.
- According to SBI projections, India will also cross the $5 trillion mark as it becomes the third-largest economy in the world.
- In coming days, as macroeconomic prospects steadily improve, India will dynamically seek fuller expression of its full potential and a transformative change in its global position,” they noted.
- Terming Uttar Pradesh as the land of the midnight sun, the SBI economists projected Uttar Pradesh and Maharashtra to cross the $500 billion mark each by FY28, accounting for nearly a fourth of India’s total GDP.