Economists at SBI, the country's largest lender, have revised their estimates on the Indian economy, stating that it is on the way of becoming the third largest in the world by 2027 itself.
SBI economists have projected that India's real GDP will grow at over 6.5% in FY24, complementing Prime Minister Narendra Modi's confidence in winning a third term and India becoming the third largest economy by 2029.
According to the economists at SBI, India's progress since 2014 suggests that it is likely to become the third largest economy in 2027, based on actual GDP data as of March 2023. This would be a significant improvement from its 10th position in 2014 and two years earlier than the previous forecast of 2029.
Further, the RBI predicts that the real GDP will grow at 6.5%, which is one of the highest estimates among economic analysts. Currently, India holds the fifth position in the global economy.
According to a report by the SBI, the GDP is projected to grow at 8.1% in the first quarter of FY24, ensuring that the overall expansion exceeds 6.5%. The report also suggests that a growth rate of 6.5-7% is now considered the new normal for the country.
The economists at the state-owned lender describe the current state of the economy as a "sustained goldilocks" period and believe that India becoming the third largest economy would be a remarkable achievement by any standards.
The economists estimate that the economy's size will increase by USD 1.8 trillion between 2022-27, surpassing the current size of the Australian economy.
They predict that by 2027, India's share in the global GDP will reach 4%, and the economy will add 0.75 trillion to its overall size every two years.
By 2047, when India will be celebrating its 100th year of independence, the country is projected to become a USD 20 trillion economy, thanks to its rapid pace of GDP expansion.
According to a report, achieving a nominal growth rate of 11-11.5% or a real growth rate of 6.5-7% per year will result in a compounded annual growth rate of 8.4% for India. The report believes that such a growth rate is highly achievable.
The report predicts that both Maharashtra and Uttar Pradesh will surpass the USD 500 billion mark in terms of their respective Gross State Domestic Product (GSDP) by 2027.
It also refers to Yogi Adityanath-led Uttar Pradesh as the "land of the midnight sun," highlighting its potential for growth.
The report emphasizes the long-term economic benefits that India will gain from Prime Minister Modi's recent visits to the United States and France.
These benefits include developments in chip manufacturing, the defense relationship, climate transition and finance, resolution of trade disputes, and the establishment of special economic zones.
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