Source : OpIndia
India has overtaken the United Kingdom to become the 5th largest economy in the world, reported Bloomberg. The development comes amidst a drastic surge in the cost of living in the UK.
As per the Gross Domestic Product (GDP) figures published by the International Monetary Fund (IMF), India achieved the feat in the last 3 months (October, November and December) of 2021. The lead over the UK was further extended in the first quarter of 2022.
“The UK’s decline down the international rankings is an unwelcome backdrop for the new prime minister, and comes in the final few days of Boris Johnson’s time in power,” the publication said.
The new Prime Minister of the United Kingdom will have to circumvent the nation through a period of growing inflation, followed by a phase of recession. India, on the other hand, is expected to perform better than its European and North American allies. The economy is likely to grow by 7%
In nominal cash terms, India’s economy stood at $854.7 billion as compared to the United Kingdom’s $816 billion on the last day of the first quarter in March this year.
Bloomberg emphasised, “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 GDP calculations were made with the help of the IMF database and the Bloomberg terminal’s historic exchange rates.
It must be mentioned that India was ranked 11 just about a decade ago. The United Kingdom had held its position as the world’s 5th largest so far but has now slipped to the 6th position. India is surging on its plan to make the country, a $5 trillion economy. India has now taken the 5th spot, and is now behind the Unites State, China, Japan and Germany.
Earlier in 2019, British consultancy multinational, PwC, had predicted that India would overtake the United Kingdom in the rankings of the world’s largest economies. The UK is projected to fall two places to 7th with France expected to march ahead of them as well.
“India and France are likely to surpass the UK in the world’s largest economy rankings in 2019, knocking it from fifth to seventh place in the global table,” PwC’s Global Economy Watch report said. The report projected a 7.6% real GDP growth rate for India, 1.7% for France and 1.6% for the UK.
The report also remarked that although France and UK had often switched places due to roughly equal populations and levels of development, India’s climb in the rankings was likely to be permanent.
“India is the fastest growing large economy in the world, with an enormous population, favourable demographics and high catch-up potential due to low initial GDP per head. It is, therefore, all but certain to continue to rise in the global GDP league table in the coming decades,” the report stated.