Economy and Business

India to “leapfrog” Britain, France to become world's 5th largest economy

India will “leapfrog” Britain and France to become the world’s fifth largest economy next year ahead of an oncoming major global economic shift towards Asia, according to a British research organisation.

Dec 26, 2017
India will “leapfrog” Britain and France to become the world’s fifth largest economy next year ahead of an oncoming major global economic shift towards Asia, according to a British research organisation.
 
The World Economic League Table (WELT) 2018 released on Monday by Centre for Economics and Business Research (CEBR) said that in dollar terms India will rise from its seventh rank to overtake those European economies next year despite the stumble of demonetisation and the introduction of Goods and Services Tax (GST).
 
“The World Economic League Table shows that despite temporary setbacks from demonetisation and the introduction of the new GST tax, India’s economy has still caught up with that of France and the UK and in 2018 will have overtaken them both to become the world’s fifth largest economy in dollar terms,” said CEBR Deputy Chairman Douglas McWilliams.
 
The CEBR projections give India the fifth spot a year ahead of the International Monetary Fund estimates, which move it up in 2019.
 
According to the IMF, the size of India's economy is currently $2.439 trillion. With an annual growth rate of 6.7 percent this year and 7.4 next year, it expects the size of India's economy to be $2.926 trillion in 2019, when it will pull ahead of France and Britain according to its projections.
 
The world's largest economies now are the United States ($19.362 trillion), China ($11.937 trillion), Japan ($4.884 trillion), Germany ($3.652 trillion), France ($2.575 trillion), Britain ($2.565 trillion) and India, according to the IMF.
 
CEBR charts a trend of global economic shift to Asia.
 
“The interesting trend emerging is that by 2032 five of the ten largest economies will be in Asia while European economies are falling down the ranking and the USA loses its top spot,” CEBR Senior Economist Oliver Kolodseike said, 
 
CEBR projected China to overtakes the US in 1930 to become the world’s largest economy.
 
According to WELT estimate, by 2032 three out of the world’s four largest economies will be Asian – China, India and Japan. South Korea and Indonesia are expected to join  list of the world’s top ten economies, with Taiwan, Thailand, Philippines and Pakistan making the top 25 list.
 
Construction activities are expected to get a tremendous boost, mainly because of India and China, according to CEBR.
 
“Construction’s share of world GDP is to reach its highest level ever, driven by ultra large global transformational projects,” Graham Robinson, director of Global Construction Perspectives, said. “The Chinese Belt and Road Initiative and the Indian infrastructural project will boost construction’s share of world GDP to 15 percent by 2032, probably the highest share of world GDP construction has seen since the pyramids or Great Wall of China were built.”

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