India has surpassed Britain to become world’s fifth largest economy, Bloomberg reported. The change in ranking has pushed the United Kingdom to the sixth spot as the country continues to grapple under the brutal cost-of-living shack. The Indian economy is forecast to grow more than 7 per cent this year. On an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of Indian economy in “normal” cash terms in the quarter through March was USD 845.7 billion. On the same basis, UK was USD 816 billion, according to the report.
IMF’s own forecasts show India overtaking the UK in dollar terms on an annual basis this year, putting the Asian powerhouse behind the US, China, Japan and Germany. A decade ago, India ranked 11th among the largest economies, while the UK was fifth. The government is expecting the economy to grow at 7-7.5 per cent in 2022-23, in line with its projections made at the beginning of this financial year. India registered a growth of 8.7 per cent in 2021-22. “We remain on course to meet the 7.4 per cent. We expect to achieve. This does not really reflect on what is expected to be annual real GDP growth. So, 7-7.5 per cent in that range. 7.4 per cent is what the IMF has predicted,” Finance Secretary T V Somanathan said on Wednesday.
What The Finance Ministry Said:
“I am not going to make a prediction more accurate than the RBI, but I am saying that today’s figure in no way is throwing us off course or what was expected and what we continue to expect. It is fully consistent with that expectation of somewhere in the region of 7-7.5 per cent real GDP growth. It is fully consistent with that,” he said. So, he said, this is very consistent with the annual estimates by international organisations as well as from the Reserve Bank of India. The RBI has projected a growth rate of 7.2 per cent for the current financial year. He further said the real GDP further increased to Rs 36.85 lakh crore in Q1 of FY 2022-23, registering a year-on-year rise of 13.5 per cent and growth of 3.8 per cent over Q1 of FY 2019-20. With a 13.5 per cent growth rate, the GDP has recovered the pre-pandemic output beyond by near 4 per cent, he said.
World GDP As A Whole:
Gross domestic product (GDP) is an estimate of the total value of finished goods and services produced within a country’s borders during a specified period, usually a year. GDP is popularly used to estimate the size of a country’s economy. GDP is most commonly measured by using the expenditure method, which calculates GDP by adding up spending on new consumer goods, new investment spending, government spending, and the value of net exports (exports minus imports). Throughout most of the world, countries’ GDPs fluctuate with the phases of different economic cycles, against a backdrop of longer-term economic growth over time; however, it’s interesting to see that despite these ups and downs, the top economies as measured by GDP don’t budge easily from the positions that they hold.
According to the International Monetary Fund, these are the highest ranking countries in the world in nominal GDP:
1.United States (GDP: 22.49 trillion)
2.China (GDP: 16.4 trillion)
3.Japan: (GDP: 5.27 trillion)
4.Germany: (GDP: 4.30 trillion)
5.India: (GDP: 3.21 trillion)
6.United Kingdom: (GDP: 3.2 trillion)
7.France: (GDP: 2.78 trillion)
8.Italy: (GDP: 2.07 trillion)
9.Brazil: (GDP: 1.87 trillion)
10.Canada: (GDP: 1.71 trillion)