Daily CUrrent Affairs 08.01.2022(‘India to surpass Japan as Asia’s 2nd largest economy by 2030’)

‘India to surpass Japan as Asia’s 2nd largest economy by 2030’

IHS Markit sees consumption spending doubling over a decade to $3 tn by 2030

India is likely to overtake Japan as Asia’s second-largest economy by 2030 when its GDP is also projected to surpass that of Germany and the U.K. to rank as the world’s No.3, IHS Markit said in a report on Friday.

Currently, India is the sixth-largest economy, behind the U.S., China, Japan, Germany and the U.K.

“India’s nominal GDP… is forecast to rise from $2.7 trillion in 2021 to $8.4 trillion by 2030,” IHS Markit said. “This rapid pace of economic expansion would result in the size of Indian GDP exceeding Japanese GDP by 2030, making India the second-largest economy in the Asia-Pacific region.” By 2030, the Indian economy would also be larger in size than the largest Western European economies of Germany, France and the U.K.

The long-term outlook for the Indian economy is supported by a number of key growth drivers.

“An important positive factor for India is its large and fast-growing middle class, which is helping to drive consumer spending,” IHS Markit said, forecasting that the country’s consumption expenditure will double from $1.5 trillion in 2020 to $3 trillion by 2030.

For the full fiscal year 2021-22, India’s real GDP growth rate is projected to be 8.2%, rebounding from the severe contraction of 7.3% year-on-year in 2020-21, IHS Markit said.

The Indian economy is forecast to continue growing strongly in the 2022-23 fiscal year, at a pace of 6.7%.

The rapidly growing consumer market as well as its large industrial sector have made India an increasingly important investment destination for multinationals in many sectors, including manufacturing, infrastructure and services.