INDIA: In recent months, IMF’s figures have been calculated based on US dollars and surprisingly India left behind the United Kingdom and became the world’s fifth-largest economy.
According to the GDP figures from the International Monetary Fund, in the first quarter, India takes a lead. The UK observed a downfall in the International rankings under Boris Johnson’s governance.
The UK’s decline in 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 a run-off.
The winner will take over a country facing the fastest inflation in four decades and growing risks of a recession that the Bank of England says could last until 2024.
On the contrary, India’s economy is forecast to grow by more than 7% this year. This quarter’s global recovery in Indian stocks just saw their weighting rise to second place in the MSCI Emerging Markets Index, trailing only China’s.
In the last decade, India was the eleventh-largest economy, whereas the UK was holding the fifth-largest but now the time has changed with the change in the position. According to the IMF’s reports from March, India is standing tall with a USD 845.7 billion economy and the UK has a market value of USD 816 billion.
UK GDP grew by just 1% in money terms in the second quarter and fell by 0.1% after adjusting for inflation. Sterling also lags the dollar against the rupee, with the pound down 8% against the Indian currency this year.
The IMF’s own forecasts show that India will overtake the UK annually this year in dollar terms, placing the Asian power behind only the US, China, Japan and Germany.
Finance Secretary T V Somanathan had projected at the beginning of this financial year, 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.”
Indian business tycoon and Mahindra Group chairman Anand Mahindra expressed his happiness and gratification in seeing India taking a lead. He took to his Twitter and wrote, “The law of Karma works. News that would have filled the hearts of every Indian that fought hard & sacrificed much for freedom. And a silent but strong reply to those who thought India would descend into chaos. A time for silent reflection, gratitude.”