Daily Management Review

PwC Predicts India Could Overtake UK As 5th Largest Economy In 2019


PwC Predicts India Could Overtake UK As 5th Largest Economy In 2019
A report by global consultancy firm PwC claims that by 2019, the Indian economy is most likely to become larger than that of United Kingdom and go up past it in the list of the world's largest economies. The climb of the Indian economy is likely to be of a permanent nature unlike those of UK and France that have changed positions on a regular basis because of very similar levels of development and almost equal populations, the report noted.
In 2019, the India is to record a 7.6 per cent growth in its real GDP compared to 1.6 per cent for the UK and 1.7 per cent for France, projected the PwC's Global Economy Watch report.
"India and France are likely to surpass the UK in the world's largest economy rankings in 2019, knocking it from fifth to seventh place in the global table," the report said.
In 2017, India became the sixth largest economy in the world surpassing France and is likely to also ouster the UK from its fifth largest position according to World Bank data.
The latest projection for the world's leading economies is made in the Global Economy Watch report by the PwC on the basis of the trends and issues impacting the global economy.
"India should return to a healthy growth rate of 7.6 per cent in 2019-20, if there are no major headwinds in the global economy such as enhanced trade tensions or supply side shocks in oil. The growth will be supported through further realisation of efficiency gains from the newly adopted GST and policy impetus expected in the first year of a new government," said Ranen Banerjee, Partner and Leader - Public Finance and Economics, PwC India.
An enormous population, favourable demographics and high catch-up potential because of a low initial GDP per head are the positives for the Indian economy which is also the fastest growing major economy of the world, said Mike Jakeman, senior economist at PwC.
"The UK and France have regularly alternated in having the larger economy, but subdued growth in the UK in 2018 and again in 2019 is likely to tip the balance in France's favour. The relative strength of the euro against the pound is an important factor here," Jakeman said.
The PwC report also predicts that in 2019, there would be an overall slowdown in the global economy and a return to average growth rates in the long run for the G7 countries.
With a GDP of $2.59 trillion, India went past France, with GDP of $2.58 trillion, as the sixth largest economy in the world in 2017 as per the World Bank data.
The GDP of the UK is about 25 billion more than that of India at $2.62 trillion. But the country is facing a huge uncertainty of Brexit.