IMF "India to Rank 4th in GDP by 2025"
Originally Forecasted for 2026, Moved Up
Next year, Japan is expected to drop one rank in terms of Gross Domestic Product (GDP), falling to 5th place in the world. The 4th position is projected to be taken by India, which has shown continuous growth recently.
The Nihon Keizai Shimbun (Nikkei) reported on the 21st, citing estimates from the International Monetary Fund (IMF), that India's nominal GDP in 2025 is expected to reach $4.3398 trillion (approximately 5985 trillion won), surpassing Japan's $4.3103 trillion (approximately 5944 trillion won).
Last October, the IMF estimated that the Indian economy would catch up with Japan by 2026. However, due to the yen's depreciation, Japan's GDP in dollar terms decreased relatively more, leading to a revision of the forecast earlier this month.
On the other hand, the Indian rupee has not depreciated significantly against the dollar since early last year, as the Reserve Bank of India showed movements presumed to be interventions in the foreign exchange market. In December last year, the IMF pointed out in its India economic report that the authorities' intervention in the rupee exchange rate might have exceeded necessary levels. However, the Reserve Bank of India rebutted, stating that the IMF's analysis was incorrect as it was based only on short-term exchange rate trends.
Except for the COVID-19 pandemic period, India has maintained high economic growth since the inauguration of the Narendra Modi government in 2014. The Reserve Bank of India expects the real GDP growth rate to reach 7% this year.
India, which ranked 10th in GDP size in 2014, surpassed the United Kingdom?which had colonized the country for about 200 years?to rise to 5th place in 2022. It is expected to overtake Germany by 2027 and become the world's 3rd largest economy. India's domestic automobile sales surpassed Japan in 2022, ranking 3rd globally after China and the United States.
Japan overtook West Germany in 1968 during its high-growth period and maintained its position as the world's 2nd largest economy for a long time. However, it fell to 3rd place in 2010 after being overtaken by China, and last year, Germany overtook it again. If India surpasses Japan next year, Japan will fall to 5th place.
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