The United Kingdom’s increasingly fragile economy has slipped down the world rankings to sixth, below that of a surging India.
The improvement in India’s economy to fifth and deterioration of the UK’s was revealed by Bloomberg News in its financial analysis based on historic exchange rates and information provided by the International Monetary Fund, and relates to the quarter ending March 31.
“On an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of the Indian economy in ‘nominal’ cash terms in the quarter through March was $854.7 billion,” Bloomberg said. “On the same basis, the UK was $816 billion.”
Bloomberg added that India’s fast-growing economy is likely to continue to improve, while the UK’s－beset by crippling inflation set to pass 18 percent in the first quarter of 2023－is unlikely to expand significantly.
Bloomberg said it expects the Indian economy to be far ahead of the UK’s in future periods.
The good news for India followed Prime Minister Narendra Modi calling on his countrymen to ensure the nation is “developed” by 2047－the 100th anniversary of independence from former colonial power the UK.
The IMF said the country is well on the way, with its economy likely to grow by 7.4 percent in the current fiscal year. Deloitte said economic growth will continue annually by 6 to 7 percent for several years.
The UK’s economy, meanwhile, has deteriorated further since the quarter ending March, with GDP growing by only 1 percent, and actually shrinking by 0.1 percent when adjusted for inflation.
The pound has also performed poorly against the US dollar in comparison to the rupee, dropping relatively by 8 percent.
The State Bank of India, or SBI, said in a note that the news that India had overtaken the UK was widely anticipated and may have happened as early as December.
“The path taken by India since 2014 reveals it is likely to get the tag of third-largest economy in 2029, a movement of seven places upward since 2014, when India was ranked 10th,” Soumya Kanti Ghosh, group chief economic adviser at SBI, was quoted by The Times of India as saying. “India should surpass Germany in 2027 and most likely Japan by 2029 at the current rate of growth.”
However, India still has some way to go to overhaul the UK economy when considered on a per capita basis, The Telegraph reported, with India’s $3.5 trillion economy achieved by a nation of about 1.4 billion people, while the UK’s $3.2 trillion economy was achieved by a country of 68 million.
According to the latest IMF rankings, the four largest economies in the world, as measured by nominal GDP, are the United States, China, Japan and Germany.