Economic Projections Look Better For India

A new economic projection by the International Monetary Fund (IMF) increases to a total net GDP of $55 trillion by 2047, a significant rise from previous expectations.

India's economy is undoubtedly one of the fastest-growing emerging markets in the world. As many American and European companies doubt their operations in China due to geopolitical factors, many of them are moving to far-cheaper India, which is sucking up many new jobs in manufacturing and raw materials. India has witnessed a dramatic decrease in unemployment and poverty, as a result.

However, new trends show that India, like China, is also becoming an extremely fast-growing consumption economy, especially in previously poor rural areas. Many Indians, with salaries from the more abundant labor market, are now willing to consume products in exchange for their money. This has given rise to a massive fast-food market in India, as well as in technology and services.

India's policies are to blame even more. In recent years, the Indian government has prioritized subsidizing new business startups, funding massive national infrastructure projects, and investments into large Indian-based companies. New firm creation in India has reached the third highest in the world since 2014, according to the IMF. Moreover, India's ballooning population is expanding an already rich labor market, and adding more consumers to the markets, thus promoting even more productivity.

India is already expected to surpass Japan and Germany as the third largest economy in the world in the next five years, but this new projection by the IMF highlights that the south Asian country could reach the ranks of the U.S. and China as a global economic superpower.