The CEBR forecasts that the Indian economy will expand by 9% in 2021 and by 7% in 2022.
“Growth will naturally slow as India becomes more economically developed, with the annual GDP growth expected to sink to 5.8% in 2035.”
“This growth trajectory will see India become the world’s third-largest economy by 2030, overtaking the UK in 2025, Germany in 2027 and Japan in 2030,” it said.
The UK-based think tank forecast that China will in 2028 overtake the US to become the world’s biggest economy, five years earlier than previously estimated due to the contrasting recoveries of the two countries from the COVID-19 pandemic.
The CEBR said India’s economy had been losing momentum even ahead of the shock delivered by the COVID-19 crisis.
The rate of GDP growth sank to a more than ten-year low of 4.2 per cent in 2019, down from6.1 per cent the previous year and around half the 8.3 per cent growth rate recorded in 2016.
The COVID-19 pandemic, the think tank said, has been a human and an economic catastrophe for India, with more than 140,000 deaths recorded as of the middle of December.
The government’s stimulus spending in response to the COVID-19 crisis has been significantly more restrained than most other large economies, although the debt to GDP ratio did rise to 89 per cent in 2020.
“We expect the United States’ share of global GDP to decline from 2021 onwards, and for the country to eventually be overtaken by China as the world’s largest economy,” the report said.
Now, it is expected to happen in 2028, five years sooner than in the previous edition of the WELT.
The coronavirus pandemic and its economic fallout will help China rise past the US to become the world’s largest economy while India just next to it.