IMF Project that India will become world 4th largest Economy

The International Monetary Fund (IMF) projected that Japan's nominal gross domestic product (NGDP) will be surpassed by India's and Japan might fall from fourth to fifth place in the world the upcoming year.

According to the IMF's April report, India's GDP is expected to reach $4.339 trillion by 2025, while Japan's GDP is predicted to reach $4.310 trillion. Because of the yen's decline, the 2025 timetable is one year earlier than anticipated.

India is home to more than 1.4 billion people and continues to see rapid economic expansion. India's real GDP growth rate in 2023 was 7.8%, whereas Japan's was 1.9%, according to the IMF.

The Indian government has pushed global businesses to relocate their production to India in addition to the robust domestic market.

The Indian government has pushed global businesses to relocate their production to India in addition to the robust domestic market. In 2027, India's GDP is predicted to overtake Germany's and move up to third position.

After Germany, Japan's economy shrank to become the fourth largest in the world in 2023.

India's nominal gross domestic product will likely outstrip Japan's in 2025 to become the worlds fourth-largest economy, according to an International Monetary Fund estimate, a year earlier than the previous projection.

The IMPS forecast in October had India surpassing Japan in 2026. In its April update, the IMF revised GDP forecasts for both countries slightly in local currency terms, but the depreciation of the Japanese yen looks to reduce Japan's economy in dollar terms, hastening the country's decline in the rankings. Japan's GDP was eclipsed by Germany in 2023. If it is overtaken by India, it will drop to fifth place.

The Indian rupee has largely remained flat against the dollar since the beginning of 2023 due to what appears to be intervention by the Reserve Bank of India. Currently it stands at about 83 rupees per dollar.  In its December 2023 report on India, the IMF noted that the authorities' intervention in the currency market was likely beyond the level needed.

The Indian central bank countered that the IMF was making an erroneous analysis based solely on short-term exchange rate trends. India's nominal GDP was the 10th largest in the world as of 2014. According to the IMP, it is expected to overtake Germany to become the worlds third-largest economy by 2027. India overtook Japan in domestic automobile sales in 2022 to become the worlds third-largest market after China and the United States.