By the year 2030, it is predicted that India will be the world’s third-largest economy, overtaking Japan perhaps in 2025, according to IMF projections. For S&P Global Ratings, India’s GDP is seen approaching USD 7.3 trillion whereas Japan’s projections will be around USD 4.2 trillion. India has recently climbed up to the third position in the pecking order of economic power in Asia, partly due to a strong post-COVID revival phase, youthful demographics and increasing economic clout. The IMF predicts that India’s GDP growth will be 7 percent in 2024 and 6.5 percent in 2025, sharply contrasting Japan which is expected to achieve only 0.3 percent growth.

The rise of India’s economy has been characterized by consumption boom, clocking 7.8 percent expansion early 2023 leading all other economies. India is tipped to achieve a GDP of USD 5 trillion by 2026, falling short of the government’s projections. With the goods and services economy growing rapidly, UBS further estimates that by the end of 2026, India will emerge as the third largest consumer market. Key contributors to this are the huge population, increasing urban income, and India’s prevalence in digital payments which comprise 46 percent of global payments. Also, India is enhancing its global presence through trade with 27 nations in Rupees rather than Dollars for transactions.

On the other hand, Japan has hurdles in growth which have become stagnant over time, it has an older aging population, and there are low rates of productivity growth. The GDP per capita of India is still lower than that of Japan, although it’s the younger and bigger population that is a longer-term asset. India’s nominal GDP forecast by 2025 is supposed to stand at $4.339 trillion surpassing Japan and also the Reserve Bank of India (RBI) expects the economic performance to remain strong with real GDP growth rate of 7.2% for the fiscal year 2024-25.

For more details : MSN.Com