While previous records declared India as the fifth-largest economy in 2017, recent data released by the World Bank reveals contrasting information. According to newly compiled figures, The United Kingdom and France have outperformed India by gaining hold of the fifth and sixth positions respectively in 2018.
A Shift in Economic Status
The economic data indicates a change in the ranking of the world’s economies. A few years ago, India had progressed to the sixth position, even relegating France to the seventh slot. Later, it rose to become the fifth-largest economy, surpassing the UK. In 2017, the size of India’s economy was $2.65 trillion, with the UK trailing at $2.64 trillion and France at $2.59 trillion.
However, this temporary supremacy was soon overthrown as both the UK’s and French economies saw significant expansions in 2018, while India lagged behind with an economic size of 2.73 trillion dollars.
Contrast in Growth Rate
The shift in these rankings can be associated with the differing growth rates of these three economies. India’s economy experienced a growth of only 3.01 percent in dollar terms during 2018, whereas it had surged by 15.72 percent the preceding year. Contrarily, the UK underwent an economic expansion of 6.81 percent in 2018, against a contraction of 0.75 percent in 2017.
In similar strides, the French economy also expanded by 7.33 percent in 2018, improving from 4.85 percent in 2017.
These fluctuations point towards the variable economic health of these nations.
| Country | Growth in 2017 | Growth in 2018 |
|---|---|---|
| India | 15.72% | 3.01% |
| UK | -0.75% | 6.81% |
| France | 4.85% | 7.33% |
Exchange Rate Impact and Future Goals
A critical factor contributing to India’s economic slowdown in dollar terms in 2018, as compared to 2017, is attributed to the exchange rate of the Indian rupee against the US dollar. The rupee appreciated by 3 percent in 2017, whereas it depreciated by 5 percent the subsequent year.
Looking towards the future, India aims to boost its economic size to $5 trillion by the fiscal year 2024-25. To achieve this goal, the Economic Survey estimated that India would need to grow by 12 percent at current prices each year. This ambitious plan underscores India’s efforts to improve its economic standing on the global platform.
