India’s GDP may cross USD 5 Trillion in FY29

BANKING AND ECONOMY

According to the International Monetary Fund’s (IMF) World Economic Outlook Database, if India’s nominal GDP is seen rising to $4.92 trillion in FY 28, then India may cross $5-trillion economy in FY29, suggested in IMF’s data. This estimation is four years beyond the target that the Narendra Modi government had set. With this GDP of $5 trillion, India would become the third-largest economy in the world.

In the current fiscal year, IMF's estimated data shows that India's GDP at current prices may grow from an estimated $3.04 trillion in FY22.

Earlier, the Union Finance ministry officials had earlier indicated that the government's target of raising India's GDP to $5 trillion by FY25 might get delayed by a year or two. As per the estimation of the Chief Economic Advisor (CEA), if the country follows 8%-9% GDP growth in the following years, the $5-trillion economy will be achieved by 2025-26 or the following year.

According to the IMF forecasts, India's nominal GDP in FY23 is expected to grow at 13.4% and at 8.2% in terms of rupee terms and in US dollar terms respectively.

The IMF also forecasted that the rupee's exchange rate works out to be 94.4 per dollar in FY28. It was assumed a steady depreciation of the rupee against the US Dollar every year.

Last month, the GDP growth forecast for India for the current financial year was forecasted at 8.2% and 7.2% by the IMF’s World Economic Outlook report and the RBI respectively. The decline in India's GDP reflects in part weaker domestic demand—as higher oil prices are expected to weigh on private consumption and investment—and drag from lower net exports.

 

   Important points for the exam:

  • As per the IMF’s World Economic Outlook Database, India’s GDP may achieve a $5-trillion economy only in FY29.
  • In the current fiscal year, IMF's estimated data shows that India's GDP at current prices may grow from an estimated $3.04 trillion in FY22.
  • The IMF also forecasted that the rupee's exchange rate works out to be 94.4 per dollar in FY28.
  • It was assumed a steady depreciation of the rupee against the US Dollar every year.

   Facts to know:

  • IMF: International Monetary Fund.
  • IMF was established in 1945.
  • Headquarters of IMF: Washington, D.C., U.S.
  • Managing Director of IMF: Ms.Kristalina Georgieva (Bulgaria).
  • First Deputy Managing Director of IMF: Ms.Gita Gopinath (Indian-American).

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