Ira Singh
Khabar Khabaron Ki,20 Feb’24
As the United Kingdom and Japan grapple with the daunting prospect of the technical recession, India shines as a beacon of economic resilience. This juxtaposition of economic fortunes not only underscores India’s growing importance in the global economy but also prompts a closer examination of the broader implications for global markets.
The United Kingdom fell into recession, with its worst gross domestic product (GDP) performance in 2023 in years, just months ahead of a general election, as per recent official data, derailing Prime Minister Rishi Sunak’s pledge to generate economic growth. Britain’s gross domestic product (GDP) fell 0.3% in the final three months of 2023, following a 0.1% contraction in the July-to-September period, the Office for National Statistics (ONS) reportedly stated. “All the main sectors fell on the quarter, with manufacturing, construction and wholesale being the biggest drags on growth…,” said, ONS director of economic statistics Liz McKeown.
While, Japan lost its spot as the world’s third-largest economy. Its economy is now the world’s fourth-largest after it contracted in the last quarter of 2023 and fell behind Germany. The government reported the economy shrank at an annual rate of 0.4% from October to December, according to Cabinet Office data on real GDP released recently, although it grew 1.9% for all of 2023. It contracted 2.9% in July-September.
Japan’s economy was the second largest until 2010 when it was overtaken by China. Japan’s nominal GDP totalled $4.2 trillion last year, while Germany’s was $4.4 trillion, or $4.5 trillion, depending on the currency conversion.
IMF projects strong India growth in 2024, says global ‘soft landing’ in sight
On the other hand, the world’s largest democracy still shines as a ‘bright spot’ on the global map, despite geopolitical conflicts and economic headwinds. India retains its position as the fastest-growing nation in the world. The International Monetary Fund (IMF) said in its latest World Economic Outlook update the economic growth in India was projected to remain strong at 6.5 per cent in both 2024 and 2025.
For the full year, Japan’s nominal GDP amounted to about $4.19 trillion, based on the dollar-yen rate at the end of the year. Germany’s 2023 GDP was equivalent to roughly $4.55 trillion, based on the year-end euro-dollar rate. India’s economy is set to overtake Japan’s and Germany’s in coming years, according to the IMF.
India’s Growth Story Continues: FinMin Report in Jan
The financial year 2023-24 marked the third successive year of over 7 per cent GDP growth, and the Indian economy is expected to become the third largest in the world having a size of $5 trillion in the next three years.
“In the next three years, India is expected to become the third-largest economy in the world, with a GDP of $5 trillion. The government has, however, set a higher goal of becoming a ‘developed country’ by 2047. With the journey of reforms continuing, this goal is achievable,” the finance ministry said in its report, ‘The Indian Economy: A Review January 2024’. It said FY24 marks the third successive year of 7 per cent plus strong growth of the Indian economy even as the global economy struggles to grow at more than 3 per cent.