United States Of America : India to be third largest economy by 2028: BAML report

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India to be third largest economy by 2028: BAML report

16
Nov '17

India may achieve strong growth over the next decade and overtake Japan in nominal gross domestic product (GDP) by 2028 to turn the third largest economy after China and the United States, says a Bank of America Merrill Lynch (BAML) report. But the report did not quantify the size of the Indian economy, which closed at $2.26 trillion last year, by 2028.

Falling dependency ratios, financial maturity and increasing incomes and affordability are the three key drivers for the country to stand among the large emerging economies, the report titled, ‘India 2028: The last BRICK in the Wall’, said.

India is already ahead of Brazil and Russia to become the second largest BRIC economy after China and is on track to cross France and Britain to emerge as the world’s fifth largest economy after Germany by 2019, a news agency reported quoting the report.

Projecting a 7 per cent real GDP growth, the report said the dependency ratio (unproductive population in the 0-14 and over-65 age group) is slated to fall to 46.2 per cent in 2028 from 52.2 per cent now and 71.7 per cent in 1990.

This should sustain the savings rate at 32 per cent of GDP, at the least, in 2028, comparable to 31.4 per cent during 2000-17, up from 20.5 per cent in the 1980s and the 1990s.

A rising savings rate should push the investment rate up to 35 per cent of GDP in 2028 from 32.4 per cent in 2017 and 22.1 per cent in the 1980s and the 1990s. That should lift growth to 10 per cent from 7.1 per cent last fiscal, the report said.

The report expects the country’s growth to be driven by services. (DS)

Fibre2Fashion News Desk – India

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