According to the Centre for Economics and Business Research (CEBR), India is on track to become the world’s third-largest economy by 2032, eventually emerging as the largest economic superpower by the end of the century. This forecast is part of the CEBR’s latest World Economic League Table report.
The report highlights several factors contributing to India’s significant economic growth. One of the main drivers is India’s sustained GDP growth rally, expected to produce an average 6.5% economic growth rate from 2024 to 2028. This robust growth is set to surpass the economies of Japan and Germany.
Key factors underpinning India’s rise include its large and youthful population, a growing middle class, a dynamic entrepreneurial sector, and increasing global economic integration. These elements are instrumental in India’s trajectory towards becoming a formidable economic power, surpassing major economies like China and the United States after 2080.
However, the report also notes challenges that India needs to address. These include poverty reduction, inequality, improvements in human capital and infrastructure, and environmental sustainability. Addressing these issues will require concerted efforts from the government, private sector, civil society, and international cooperation.
In terms of economic performance, India recorded a strong GDP growth of 7.2% in 2022-23. However, the CEBR anticipates a slight moderation in growth at 6.4% for 2023-24, which will still result in output surpassing pre-pandemic levels by 17.2%. Despite robust output growth, the inflation is projected to close at around 5.5% in 2023, primarily driven by food and energy price shocks.
Public sector debt is identified as a long-term growth constraint, with government debt as a percentage of GDP expected to reach 81.9% in 2023, exceeding the 81% recorded in 2022. The government’s response includes reforms to stimulate private investment, easing foreign direct investment norms, privatisation efforts, and tax regime simplification.
Overall, India’s economic outlook appears highly promising, with its potential to reshape the global economic landscape significantly by the end of the century