India to be 3rd largest economy by 2030, population a challenge: S&P

The country is now the fifth largest economy and is expected to have the world's largest population by 2035.

"Its 2024 entry into JP Morgan's government emerging market bond index could provide additional government funding and unlock significant resources in domestic capital markets. This is only a first step –investors will continue looking for improved market access and settlement procedures," S&P Global said in its report, titled 'Look forward Emerging Markets: A decisive decade'.

Emerging markets will play a crucial role in shaping the global economy over the next decade, averaging 4.06 per cent gross domestic product (GDP) growth through 2035, compared to 1.59 per cent for advanced economies, it said.

“Also by 2035, India will be cemented as the world's third-largest economy, with Indonesia and Brazil ranking eighth and ninth, respectively," it said.

India has taken measures to improve its weak fiscal flexibility by boosting its capital expenditure, further supporting long-term growth, it noted.

As the next decade approaches, the economic trajectory of emerging markets will likely be heavily influenced by their governments' design and execution of long-term growth strategies, the US-based rating agency observed.

"Establishing ambitious long-term growth goals provides a clear roadmap for progress. These goals indicate that policymakers are planning for the future, identifying vulnerabilities and prioritising strategic areas to mobilise capital and investment alongside the private sector," S&P Global Ratings added.

ALCHEMPro News Desk (DS)