India is about to overtake Japan in terms of Gross Domestic Product. A new era opens in Asia
India's nominal gross domestic product will likely surpass that of Japan in 2025, becoming the world's fourth-largest economy, according to an International Monetary Fund estimate reported by Nikkei , a year ahead of the previous projection.
India's GDP will likely amount to $4.3398 trillion in 2025, compared to Japan's $4.3103 trillion, the IMF said in its latest estimate.
According to the IMF October forecast, India would overtake Japan in 2026. In its April update, the IMF slightly revised the GDP forecasts of both countries in local currency terms, but the depreciation of the Japanese yen seems shrink Japan's economy in dollar terms, accelerating the country's decline in the rankings.
Japan's GDP has been eclipsed by Germany in 2023. If it is overtaken by India, it will fall to fifth place.
The Indian rupee has remained largely flat against the dollar since the start of 2023, due to what appears to be intervention by the Reserve Bank of India. It currently stands at around 83 rupees per dollar.
In its December 2023 report on India, the International Monetary Fund noted that authorities' intervention in the currency market was likely above the necessary level.
India's central bank countered that the IMF was making a flawed analysis based solely on short-term exchange rate trends.
India's nominal GDP was 10th in the world in 2014. According to the IMF, it is expected to overtake Germany to become the world's third-largest economy by 2027. India surpassed Japan in domestic automobile sales in 2022, becoming the third world market after China and the United States.
Although the country suffered an economic collapse during the COVID-19 pandemic, it has seen high growth in recent years, thanks to a growing population. The Reserve Bank of India expects GDP to grow by 7% in real terms in fiscal 2024.
Although India's middle class is expanding, nominal GDP per capita currently hovers around $2,000. This is about a fifth of China's level and close to that of Bangladesh.
So New Delhi is turning out to be the new tiger of Asian growth, and the one with the largest demographic dimensions, therefore better able to support, over time, development with the growth of a real middle class.
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The article India is about to overtake Japan in Gross Domestic Product. A new era opens in Asia comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/lindia-staa-per-superare-il-giappone-per-prodotti-interno-lordo-si-apre-una-nuova-epoca-in-asia/ on Mon, 22 Apr 2024 16:16:27 +0000.