New Delhi: India has become the fifth largest economy in the world, beating the UK. This is the second time India has beaten the UK in terms of economy, with the first one being in 2019. Britain has dropped behind India to become the world’s sixth largest economy, delivering a further blow to the government in London as it grapples with a brutal cost-of-living shock.
According to GDP figures from the International Monetary Fund, The calculation is based on US dollars, and India extended its lead in the first quarter.
According to the media report, The UK’s decline down the international rankings is an unwelcome backdrop for the new prime minister. Conservative Party members choose Boris Johnson’s successor on Monday, with Foreign Secretary Liz Truss expected to beat former Chancellor of the Exchequer Rishi Sunak in the run-off.
In the middle of rising inflation in the UK, the Bank of England says it may last well into 2024, and the winner will take over a nation facing the fastest inflation in four decades and rising risks of a recession.
By contrast, the Indian economy is forecast to grow more than 7% this year. A world-beating rebound in Indian stocks this quarter has just seen their weighting rise to the second spot in the MSCI Emerging Markets Index, trailing only China’s.
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 through March was $854.7 billion. On the same basis, the UK was $816 billion.
The UK is likely to have fallen further since. UK GDP grew just 1% in cash terms in the second quarter and, after adjusting for inflation, shrank 0.1%. Sterling has also underperformed the dollar relative to the rupee, with the pound falling 8% against the Indian currency this year.
The IMF’s forecasts show India overtaking the UK in dollar terms on an annual basis this year, putting the Asian powerhouse behind just the US, China, Japan, and Germany. A decade ago, India ranked 11th among the largest economies, while the UK was 5th.
(Vinayak)
