India to be 3rd largest economy in 2006
January 26, 2006
“India is expected to become the world’s third largest economy this year after the United States and China, a leading economist in the US said on Tuesday.
Dr William T Wilson, chief economist for Keystone India, a Chicago-based firm providing cross-border trade facilitation and asset management services in the US and India, said after significant accelerations in economic growth recently, India’s economy is expected to equal or surpass Japan as the world’s third largest sometime in 2006.
“The results of liberalising strategic sectors such as telecom, banking, aviation and real estate are now beginning to show,” Wilson, a former chief economist for Ernst & Young, said.
Wilson said India’s economy measured in PPP (purchasing power parity) terms will eclipse the $4 trillion mark in 2006, making it equal to or greater than Japan’s.
Wilson noted that after growing at 8.5 per cent and 6.9 per cent in 2003 and 2004 respectively, India’s economy is expected to grow 7.8 per cent in 2005-2006 and then decelerate modestly to seven per cent in 2006-2007.”
Isn’t that simply amazing. We are living in times where India’s Shining! I bet this is a good time for most investment bankers and FII’s to enter the Indian Market, incase they already haven’t done so.
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1.
kiren | June 28, 2006 at 5:28 am
It’s also BS. Size of economy is measured by GDP.
It is nowhere near to becoming the worlds 3rd largest economy. It may get there by 2050, but not before.
And china isn’t even the second largest. Only this year it surpassed the UK to become the 4th largest. The top 4 are US, Japan, Germany, China.
India is currently the 12th largest.
Goldman Sachs also recently did a study on this, to determine what the 7 largest economies would be by 2050 and yes, at that time, India was the 3rd largest, but it will take up until about 2019 to even get into the top 7.
Also realize that having a large economy, doesn’t necessarily mean everyone in the country is prosperous. Even by the time it’s 2050 and the US is like second largest (supposedly), its per capita GDP will be the highest its ever been, and higher than anywhere else in the world. In other words, Americans will still be the richest.
2.
harjeet | June 28, 2006 at 8:04 am
Kiren,
Read the article again carefully. It says “India’s economy measured in PPP (Purchasing Power Parity)” not GDP. Here are the figures for the top 4 nations in terms of PPP according to the World Bank figures for 1999.
USA – US$ 8351 billion
China – US$ 4112.2 billion
Japan – US$ 3042.9 billion
India – US$ 2144.1 billion
There are two ways of calculating economic growth
1. GDP (Nominal) –> http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29
2. GDP (in terms of PPP) –> http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29
Hope this clears the air a bit. India should surpass Japan in terms of PPP by next year. Yes, I agree that having a large economy doesnt mean that everyone is prosperous. But its becoming a leveled playing field and per capita income is on the rise.