{"id":2584,"date":"2022-01-14T09:39:00","date_gmt":"2022-01-14T09:39:00","guid":{"rendered":""},"modified":"2025-11-12T11:43:19","modified_gmt":"2025-11-12T06:13:19","slug":"india-3rd-largest-economy-by-2031","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/india-3rd-largest-economy-by-2031\/","title":{"rendered":"India will be the 3rd largest Economy by 2031 – Find out what CEBRs latest report says today"},"content":{"rendered":"
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A fortnight ago, people felt things would be dreary in 2022. The world is recovering despite the rising inflation<\/a>, supply chain issues, Omicron-led flight cancellation, an extension of work from home, curfews, and curtailed travelling,<\/p>\n\n\n\n

The World economy has grown and will reach $100tn in 2022, says the Centre for Economic and Business Research (CEBR) in its 2022 report. The analysts foresee global<\/a> economic growth at 4.2% better than expected before. <\/strong><\/p>\n\n\n\n

This growth will push the World\u2019s GDP to over $100tn, higher than its level before the pandemic and two years before its previous deadline of 2024.<\/p>\n\n\n\n

Not just the world, but India may overtake France again and become the sixth-largest economy in the world. Moreover, the CEBR report predicts a reversal of the historic mean with China and India moving up the league table by 2031. The GDP of the US is $22tn, which is larger than the combined GDP of 150 countries today.<\/p>\n\n\n\n

Japan, China, the US, and Germany account for 50% of the world GDP. Although, the economic conditions are changing with the economic gravity shifting towards Asia. China, Japan, India, and Korea accounted for $26tn in 2021.<\/p>\n\n\n\n

Experts forecast China will overtake the US to top the table in 2030, while India will overtake Germany to become the 3rd largest economy by 2031. <\/strong><\/p>\n\n\n\n

Will India really become the third-largest economy?<\/p>\n\n\n\n

Well, like all economic forecasts these ratings are contingent of several other factors too.  <\/p>\n\n\n\n

Let\u2019s look at the factors that drive GDP in India <\/strong><\/p>\n\n\n\n

India is the second-largest country population-wise globally. In 2020, India\u2019s per capita GNI was $6,284, making it a lower-middle-income country. Even though India is a large exporter of cars, chemicals and clothing, the services sector with flourishing industries in IT and software account for most of the economic activity.<\/p>\n\n\n\n

India had been losing its growth momentum just before the COVID-19 crisis. However, the pandemic knocked India off course, and its GDP sank to a ten-year low of 4.2%. As a result, after surpassing the UK in 2019, the UK overtook India again in 2021.<\/p>\n\n\n\n

Causes of slowdown<\/strong><\/p>\n\n\n\n

The instability in the banking system, adjustment to reforms, and a slowing of global trade were some factors that led to a slowdown in India\u2019s growth. And then, the COVID-19 struck, causing both economic and human losses. India had ~140,000 deaths by mid-December, i.e., ten deaths per 10,000 cases.<\/p>\n\n\n\n

The nationwide lockdown, curbs on economic activities, drying up global and domestic demand led to a slide when India\u2019s Q2 2020 GDP fell 23.9% below its 2019 level.<\/p>\n\n\n\n

However, as lockdowns lifted, the economic activities and growth rose gradually. The agricultural sector was a key driver in India\u2019s recovery buoyed by a bumper harvest.<\/p>\n\n\n\n

The CEBR Forecasts:  <\/strong><\/p>\n\n\n\n

The CEBR report said India\u2019s GDP would fall 3% in 2020 and rise 8% in 2021. Per the Union Ministry of Statistics and Program Implementation, India\u2019s GDP grew 8.4% in Q2 2021-22 compared to a 7.4% contraction in the same quarter in 2020.<\/p>\n\n\n\n

Analysts foresee the UK staying ahead till 2024 before India takes over again, while the UN expects India\u2019s population to overtake China\u2019s in 2027.<\/p>\n\n\n\n

CEBR estimates India\u2019s economy will expand 7.0% in 2022.<\/p>\n\n\n\n

Growth will naturally slow as India becomes more economically developed, with an annual GDP that may sink to 5.8% in 2035.<\/p>\n\n\n\n

This growth trajectory will see India become the world\u2019s third-largest economy by 2030, overtaking the UK in 2025, Germany in 2027 and Japan in 2030.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

India\u2019s road to reach the third spot on the WELT<\/strong><\/p>\n\n\n\n

The development of the COVID-19 pandemic domestically and internationally will influence India\u2019s pace of fiscal recovery. India manufactures most of the world\u2019s vaccines, and its 42-year-old vaccination programme that targets 55 million people each year will help it roll out the vaccines successfully and efficiently in 2022.<\/p>\n\n\n\n

The medium to long-term benefits of reforms like the 2016 demonetization will deliver economic benefits. The government\u2019s stimulus spending in response to the COVID-19 crisis was substantially more controlled than most other large economies, though the debt to GDP ratio rose to 89% in 2020.<\/p>\n\n\n\n

Most of India\u2019s workforce is engaged in the agricultural sector, so the changes must be gradual. These reforms must balance long-term efficiency gains with the need to support incomes in the short term.<\/p>\n\n\n\n

An increase in infrastructure spending will help India unlock substantial productivity gains. So, any benefits the country accrues will depend on the government\u2019s approach to infrastructure spending.<\/p>\n\n\n\n

These are forecasts dependent on several global and domestic factors. We will have to wait and see whether India surpasses the UK and Germany to become the third-largest economy.<\/p>\n\n\n\n

While we consider the economy, let\u2019s do our part and invest wisely for the long term. Subscribe to our 5 in5 Wealth Creation<\/a> Strategy and begin your journey today.<\/p>\n\n\n\n

Read more:  How Long-term investing helps create life-changing wealth \u2013 TOI<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

A fortnight ago, people felt things would be dreary in 2022. The world is recovering despite the rising inflation, supply […]<\/p>\n","protected":false},"author":5,"featured_media":2585,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[11],"tags":[],"class_list":["post-2584","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy"],"_links":{"self":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/2584","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/comments?post=2584"}],"version-history":[{"count":2,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/2584\/revisions"}],"predecessor-version":[{"id":63994,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/2584\/revisions\/63994"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media\/2585"}],"wp:attachment":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media?parent=2584"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/categories?post=2584"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/tags?post=2584"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}