Indian economy to beat France, UK in two years

India might regain its position as the sixth largest economy next year, but become the third largest economy only in 2031, a year later than the earlier prediction.

The country will recapture the sixth position from France next year and overtake the UK in 2023, according to a Londonbased think-tank, Centre for Economics and Business Research (CEBR).

As per the latest CEBR forecast, India will become the third largest economy only in 2031. Last year, it had predicted that the country would grab that slot in 2030 by overtaking the UK in 2025, Germany in 2027 and Japan in 2030.

In 2018, the Indian economy had slipped a notch lower to France when the World Bank had calculated India’s GDP at $2.72 trillion. France had a GDP of $2.77 trillion then. However, in 2017 India had overtaken France to become the globe’s sixthlargest economy at $2.65 trillion, but slipped again.

After a GDP contraction of 7.3 per cent in 2020, Indian GDP grew 20.1 per cent in the second quarter of 2020, followed by 8.4 per cent growth in Q3 2021. Overall, the economy is estimated to have grown by 8.5 per cent in 2021 over last year and the GDP in 2021 expected to be 0.6 per cent above 2019 levels.

CEBR has also predicted that the global economy is set to cross $100 trillion next year, two years earlier than the previous forecast.

Global gross domestic product will be lifted by the continued recovery from the pandemic. This will see the economy surpass the $100-trillion mark two years early in 2022.

However, if inflation persists it may be hard for policy makers to avoid tipping their economies back into recession.

“The important issue for the 2020s is how the world economies cope with inflation,” said Douglas McWilliams, CEBR’s deputy chairman. “We hope that a relatively modest adjustment to the tiller will bring the non-transitory elements under control. If not, then the world will need to brace itself for a recession in 2023 or 2024.”

CEBR also predicts that China will overtake the US in 2030, two years later than forecast a year ago. The UK is on track to be 16 per cent larger than France in 2036 despite Brexit. Germany will overtake the Japanese economy in 2033.