India will Beat Japan and Germany to Become 3rd-Largest Economy — Morgan Stanley

LAGOS (CoinChapter.com) — India will surpass Japan and Germany to become the world’s third-largest economy, according to S&P Global and investment bank Morgan Stanley.

India’s GDP Will Cross $7.5T

India’s gross domestic product (GDP) will likely cross $7.5 trillion by 2031. The forecast takes cues from India’s annual nominal GDP growth, which will likely average 6.3% through 2030.

“India is gaining power in the world economy, and in our opinion these idiosyncratic changes imply a once-in-a-generation shift and an opportunity for investors and companies.”

Morgan Stanley said.

Similarly, a United States Department for Agriculture Economic Research Service (USDA) projection revealed that India’s economy would surpass that of four developed nations — Japan, Germany, Britain, and France.

The estimate by USDA, based on data collated by World Bank and International Monetary Fund (IMF), assumes the Indian economy will expand annually at an average of 7.4% to $6.84 trillion by 2030. This will make the Asia country economy bigger than that of Japan ($6.37 trillion) and Germany ($4.38 trillion).

India’s annual economic output could also become twice the size of Britain’s ($3.6 trillion) and France’s ($3.44 trillion) in the next fifteen years. IMF’s managing director Christine Lagarde has repeatedly described India as a “bright spot” and predicted that it will surpass Germany by 2030.

The Indian Economy 2.0

Meanwhile, in its report entitled ‘Why This Is India’s Decade,’ Morgan Stanley highlighted global trends and policies that will lead to the emergence of a “New India.” It posited that India would drive a fifth of global growth through the end of this decade.

Notably, India’s economic growth is estimated to push the number of households earning by almost fivefold in the coming decade. The rising household earnings imply that GDP will likely double by the end of this decade.

Moreover, India’s per-capita income is expected to rise from $2,278 to $5,242 in 2031, setting the stage for a discretionary spending boom.

Furthermore, the report indicated that the number of people employed in India for jobs outside the country is likely to double to over 11 million. It will invariably boost India’s global spending on outsourcing from $180 billion per year to around $500 billion by 2030.

Furthermore, the report estimates that India’s manufacturing share of GDP will rise to 21% by 2031. It implies an incremental $1 trillion manufacturing opportunity. India’s global export market share is expected to double to 4.5% by 2031.

Consequently, India’s services exports will almost treble to $527 billion from $178 billion recorded last year.

ALSO READ: India to Replace China as New Asian Power Amid G20’s Criticism of Russia

Other sectors highlighted by the report to witness a significant boost include;

• E-commerce to double from 6.5% to 12.3% by 2031.
• The workforce in the technology services sector is to jump from 5.1 million in 2021 to 12.2 million in 2031.
• Healthcare in India is to rise from 30/40% to 60-70%.
• The energy sector is to witness around $700 billion in growth.
• Internet users to increase from 650 million to 960 million.
• Online shoppers will grow from 250 million to 700 million over the next 10 years.

US, China Will Continue To Lead The Global Economy

Meanwhile, despite the impressive growth India is estimated to record, the US will continue to be the global leader, closely followed by China.

According to USDA, the US will continue to dominate globally with an annual economic output of $24.8 trillion in 2030. However, it is estimated to grow by an average annual 2.1% from $16.97 trillion in 2016. China will close the gap with the US by growing its GDP by 5.3% to $ 19.2 trillion by 2030 from $ 9.4 trillion in 2016.

Interestingly, it’s important to note that India expected to emerge as a superpower ranked only after the US and China. Notably, management consultant PricewaterhouseCoopers (PwC), in a report entitled “The World in 2050,” said by 2040 will be a superpower.

It said India’s GDP in purchasing power parity would grow to $30 trillion from $8.7 trillion in 2016. While the US will grow from $18.6 trillion to $28.3 trillion in the same period. Also, China will continue to dominate, with its GDP rising from $21.3 trillion to $47.4 trillion by 2040.