India set to become world's 3rd-largest economy by 2032: CEBR

The country has reported a promising outlook with a Purchasing power parity (PPP)-adjusted GDP per capita of $9,183 in 2023. Following a solid 7.2 per cent growth in the fiscal 2022-23, it is set to experience a slight moderation with a 6.4 per cent growth in 2023-24, pushing economic output 17.2 per cent above pre-pandemic levels. This forecast is attributed to a global demand slowdown and the Reserve Bank of India's stringent monetary policies aimed at reining in inflation, CEBR said in its World Economic League Table 2024 report.

Despite the upbeat growth figures, the nation anticipates ending 2023 with a 5.5 per cent inflation rate, spurred by escalating food and energy costs. While this figure is beneath the decadal average, it hovers within the central bank's target range. The RBI's assertive stance includes a 250-basis point rate hike since May 2022, culminating in a 6.5 per cent rate as of February 2023.

However, concerns loom with the public sector debt, expected to rise to 81.9 per cent of GDP in 2023, a slight uptick from the previous year. The government's borrowing, marked at 8.8 per cent of GDP, reflects an expansionary fiscal policy focusing on infrastructure, healthcare, and social welfare enhancements. In conjunction with these spending increases, the government is pushing for reforms to attract private investments, streamlining foreign direct investment norms, privatising state enterprises, and overhauling the tax regime.

The report said that India must address challenges such as poverty reduction, inequality, human capital and infrastructure improvement, and environmental sustainability in order to become the world’s third largest economy.

ALCHEMPro News Desk (KD)