surpassed the UK to become the fifth largest economy, and India is in a frenzy.
IMF data, after correction, showed that in the first quarter of this year at the end of March, India's nominal GDP was 854.7 billion US dollars, higher than the UK's 816 billion US dollars in the same period. In addition, the IMF expects that India's GDP will still surpass the UK's for the full year 2022, as the UK's GDP contracted by 0.1% in the second quarter of 2022, and the GBP/INR exchange rate fell 8% this year. If India can maintain its current momentum, by 2027, its economy will be about 20% larger than that of the United Kingdom.
In addition, the latest report released by the State Bank of India on September 3 shows that according to the current economic growth rate, India is likely to surpass Germany and Japan, and achieve the goal of entering the "top three in the world" by 2030. Ten years ago, India ranked only 11th in the global economy, and now it has become the fifth largest economy after the United States, China, Japan and Germany. Many Indian politicians, media, entrepreneurs and people are delighted that India's GDP surpasses that of the United Kingdom.
Indian Finance Minister Nirmala Sitharaman said: "India is the fastest growing economy in the world with double digit growth rate and zero chance of India falling into recession India's foreign minister, Subrahmanyam Jaishankar, praised India for achieving a "huge social transformation" and said India was ready for a 7% to 8% growth and recovery.
Subrahmanyan Chandrasekhar, an official at the Indian Ministry of Commerce and Industry, said: "It is difficult to imagine how far our economy will develop in 2047 because it changes very fast. India's total economy once accounted for the world's economy. 25% of the total, and I think we're going back to number two in the world." He was referring to the fact that India was the world's largest economy, accounting for more than 25% of the world's economy, before it became a British colony in 1947. In 2047, India may surpass China or the United States to become the second largest in the world.
"India has overtaken the UK to become the world's fifth largest economy," said Shilan Shah, senior India economist at independent research firm and consultancy Capital Economics, citing the latest IMF data. "Looking ahead, India looks set to continue climbing the global rankings. Overall, we think India will overtake Germany and Japan to become the world's third-largest economy within the next decade."
India's economic growth has benefited from its manufacturing, but The data authenticity of the revised GDP statistics law is open to question
" Guardian " analyzed that a key factor in India's continued economic growth is the development of its manufacturing industry and the continuous enhancement of its exporting countries' capabilities. India says its trick is to benefit from a young workforce and position itself as a manufacturing powerhouse. In the "Make in India" initiative proposed by the Indian government, India said that it would increase the proportion of manufacturing in GDP from 15% to 25%, and launched a number of supporting incentive policies.
Thanks to a large, well-educated, and often English-speaking middle class, India has developed world-class IT and pharmaceutical industries. In addition, the demographic dividend also provides a continuous consumer market for India, with strong consumer demand accounting for about 55% of the total economic output.
Nguyen Trinh, emerging markets economist at (Natixis) in Hong Kong, said the outlook for India is good if it can keep investing. “Demand from India is expected to be strong because of its demographics. Positively, an increase in the working-age population will drive demand for necessities such as food and energydemand and investment in infrastructure. The normalization of activity in the wake of the pandemic and increased government spending, especially in infrastructure investment , is helping consumption grow at a double-digit rate. "
India's Central Bureau of Statistics announced on August 31 that from April to June this year, India's GDP was about 36.85 trillion rupees, a year-on-year increase of 13.5%, and these increases were mainly due to the lifting of epidemic prevention and control measures, manufacturing and The services sector is booming. Although double-digit growth rates are unlikely to repeat in subsequent quarters, India has benefited from economic liberalization in its private sector, a rapidly growing workforce, and a realignment of global supply chains. It is still expected to achieve 7% growth this year.
India's economy seems to have a bright future, but is the dazzling data a true representative of its economy?
In 2015, the Central Bureau of Statistics of India announced that it would change GDP calculated at market prices as the India overtook China as the world's fastest growing economy for the first time since the main measure of economic growth, and changed the base year from May 2004 to December 2011. But soon, its revised The credibility of the GDP statistical method has been questioned. First, the National Sample Survey Organization (NSSO) of India found that the self-filled MCA-21 database used by the new GDP statistical method to estimate the manufacturing and service industries is very flawed. 45% of the units in the sector were "not surveyed/defective" or had significant deficiencies, and those in the manufacturing sector were not verified.
Subsequently, then chief economic adviser Arvind Subramanian found that India had The economic growth rate between 2011 and 2017 is grossly overestimated, India's average annual gross domestic product (GDP) growth rate between 2011 and 2017 was in fact around 4.5%, not the official estimate of 7% .
In addition, after the Indian official revised the statistical method of GDP in 2015, it made another adjustment in 2018. In the two revisions, the core is mainly two points, one is to replace the GDP calculated at market prices The GDP calculated from the cost of production factors means that the slums in Mumbai can also be regarded as real estate; the second is the adjustment of the base year, which leads to the loss of the possibility of long-term comparison of economic changes. The per capita GDP of India is lower than the global average. It is still a poor country in the world
Although the SBI research report shows that in 2022 India's nominal GDP will reach 3.89 trillion US dollars, surpassing the UK's 3.68 trillion US dollars. However, the previous World Bank database shows that in 2021 India GDP per capita (in current dollars) is $2,277, compared to the global average of $12,263, which is 5.4 times that of India.
compares India to the other five largest economies, showing a wider gap: US GDP per capita is 69,288 USD, Germany is $50,802, UK is $47,334, Japan is $39,285, China is $12,556, and even Bangladesh also has a higher GDP per capita at $2503.
Also, India's average is low on Purchasing Power Parity (PPP) numbers that reasonably compare the gross domestic product of countries. The World Bank database shows that in 2021, India's per capita GDP in purchasing power parity will be $7,333.5, compared to the global average of $18,721.6, or 2.6 times India's.
India remains one of the poorest countries in the world. In May 2022, a study sponsored by the Prime Minister's Advisory Council (EAC-PM) showed that Indians earning 25,000 rupees per month (about RMB 2,188) or 300,000 rupees (about 260,000 yuan) per year in India Ranked among the top 10% of the working class in the country.
Moreover, GDP per capita also includes non-household income, such as income from central and state governments, private businesses, partnerships, trusts, etc., so it is not a true measure of household financial health. Although Indian billionaire Gautam Adani managed to break into the top 10 of the world's richest people after becoming Asia's richest man in February this year, this is not very important for ordinary Indians or family finances.It doesn't make much sense, as per capita income is not growing at all.
At the same time, economic difficulties have led to a high suicide rate in India in 2021. According to statistics from the National Crime Statistics Bureau of India, 25.6% of the suicides are daily wage earners, 12.3% are self-employed, and 8.35% are unemployed. Another 6.6% are farmers and farm laborers. In addition, another sign of the deteriorating financial situation of households is the number of policy surrenders prematurely , data analysis by the National Daily of India shows that the number of surrendered policies in India in 2022 is 3.3 times that in 2021. Expert analysis of
: Whether India can grow rapidly remains to be seen. Bibek Debroy, chairman of the Prime Minister's Economic Advisory Council of India, said that although the economic growth rate of 7% to 7.5% does not seem too high, historical data shows that such growth can be maintained for a long time. rate is a difficult task. Only once in the past 30 years has India recorded GDP growth above 7% for five consecutive years.
In addition, due to the long-term slowdown of the Indian economy before, resulting in a low statistical base, it is not uncommon for the growth rate to suddenly jump sharply. Whether the subsequent growth rate can continue this trend remains to be seen.
The US credit rating agency Moody's also believes that India's GDP growth will slow to 7.7% in 2022 from 8.3% in 2021, and will further decline to 5.2% in 2023. Some economists speculate that rising interest rates and a slowing global economy will negatively affect domestic economic activity in India.
Jiupai news reporter Liang Xia
[Source: Jiupai News]
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