India has become the fifth largest economy in the world, beating the UK, a report has said. The country has become the fifth biggest economy during the last three months of 2021, pushing the United Kingdom to the sixth spot, with the country grappling with a harsh shock of high cost of living. This is the second time India has beaten the UK in terms of economy, with the first one being in 2019.
As per a Bloomberg report, the size of the Indian economy with regards to ‘nominal’ cash was $854.7 billion during the quarter through March. On the contrary, the same for the UK was $814 billion. This was calculated on an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter.
This calculation is based on US dollars, with India further extending its lead in the first quarter of the current financial year, according to GDP figures from the International Monetary Fund.
UK is currently seeing its inflation grow by the fastest pace in four decades, and also faces a threat of a recession that may last well into 2024 as per the Bank of England. On the contrary, the Indian economy is forecast to grow more than 7 per cent this year.
“A world-beating rebound in Indian stocks this quarter has just seen their weighting rise to the second spot in the MSCI Emerging Markets Index, trailing only China’s,” as per the Bloomberg report.
India now trails behind the United States, China, Japan and Germany in terms of economy. A decade ago, India’s rank was 11th among the world’s largest economies, while UK used to stand firm at Number 5.
As per the IMF’s forecast, India is set to take over the UK in dollar terms on an annual basis this year. The pound has fallen 8 per cent against the Indian rupee this year.
The report comes two days after government data showed that India’s gross domestic product (GDP) rose 13.5 per cent in the June 2022 quarter (Q1FY23) as compared with the 20.1 per cent growth registered in Q1 2021-22.
“Real GDP or gross domestic product (GDP) at constant (2011-12) prices in Q1 2022-23 is estimated to attain a level of Rs 36.85 lakh crore, as against Rs 32.46 lakh crore in Q1 2021-22, showing a growth of 13.5 per cent as compared to 20.1 per cent in Q1 2021-22,” according to an official statement.
According to the latest data released by the National Statistical Office (NSO), during April-June 2022, the country’s gross value added (GVA), which is GDP minus net product taxes and reflects growth in supply, grew 12.7 per cent.