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India Anticipated To Be Fastest Growing In Next Three Years, Set to Become Third Largest Economy By 2030: S&P

Nishtha Anushree

Dec 05, 2023, 01:55 PM | Updated 01:55 PM IST

Indian Economy snapshot (INDRANIL MUKHERJEE/AFP/Getty Images)
Indian Economy snapshot (INDRANIL MUKHERJEE/AFP/Getty Images)

S&P Global Ratings projected on Tuesday (5 December) that India will ascend to the position of the world's third-largest economy by 2030, anticipating a 7 per cent GDP growth in the fiscal year 2026-27.

According to its Global Credit Outlook 2024, S&P predicted a 6.4 per cent GDP growth in the fiscal year ending March 2024 (2023-24), compared to the previous financial year's 7.2 per cent, Indian Express reported.

The growth rate is expected to hold at 6.4 per cent in the following fiscal year (2024-25) before increasing to 6.9 per cent and eventually reaching 7 per cent in 2026-27, according to the rating agency.

S&P highlighted that India is poised to become the third-largest economy by 2030, projecting it as the fastest-growing major economy in the next three years.

India presently holds the fifth position in the global economy, trailing behind the US, China, Germany, and Japan. S&P emphasised that a crucial challenge lies in India's potential transition into a global manufacturing hub, underscoring the importance of developing a robust logistics framework for transforming the nation from a services-dominated economy to one dominated by manufacturing.

The report also stressed the significance of unlocking labor market potential through upskilling workers and increasing female participation in the workforce, emphasising that success in these areas will enable India to harness its demographic dividend.

S&P additionally highlighted the potential for a thriving domestic digital market to drive expansion in India's high-growth startup ecosystem, particularly in financial and consumer technology, over the next decade. In the automotive sector, India is seen as poised for growth, building on infrastructure, investment, and innovation, according to S&P.

Nishtha Anushree is Senior Sub-editor at Swarajya. She tweets at @nishthaanushree.

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