India economy size: Has India really become a $4 trillion economy? Not quite

2023-11-20 11:03:16

On Sunday, social media was abuzz with reports suggesting that India had become a $4 trillion economy. But the country still has some time to before it crosses this milestone.

Overall growth in nominal GDP will be 10.5% in FY24, as per Budget estimates, pushing India to a $3.7 trillion figure. India’s GDP will reach $4.2 trillion next fiscal, as per IMF data. Meanwhile, it would take another three years for India to surpass Japan as the fourth-largest economy and yet another year for it to surpass Germany to become the third-largest economy in the world.

Indian economy grew 8% in nominal terms in the first quarter of FY24.

The economy would need to average nominal growth of 9.1% over the next few years to become the third largest economy by 2027, when it will also reach the $5 trillion mark, as per IMF estimates. Indian economy has averaged a nominal growth of 10% between FY19 and FY23 and 11.8% between FY13 and FY18.

The screenshots of the dashboard are taken from a YouTube video (https://www.youtube.com/watch?v=pp2OVys46_g), which claims to derive its numbers from IMF projections for 2023.

A year to go……

India will be $4.2 trillion economy by FY25 as per IMF
In FY24, it will reach $3.7 trillion, according to Budget numbers
RBI and experts predict growth momentum to slowdown in H2FY24

…to reach the key milestone

Surpass Japan as the fourth largest economy in 2026
Become $5-trillion economy by 2027 and surpass Germany as the third-largest economy
Nominal growth will have to average 9.1% to become $5 trillion in 2027