India will surpass Japan in terms of gross domestic product and become the world's fourth-largest economy, according to a Japanese media report on Thursday.
The article appeared in the Japan Times, which drew its findings from interviews with a few Japanese economists, among them Marcel Thieliant head of Asia-Pacific for Capital Economics.
"Going by our previous projections, we were looking at India overtaking Japan in 2026. The projections are being revised in the wake of recent news, " the report quoted Thieliant saying.
The IMF foresees a switch-over in 2025. However, S&P Global Ratings believes it will take place between the two countries sometime in 2030, according to the article.
According to economists, it is the country that steadily climbed since about 2000 in terms of economic potential and has already exceeded the GDP of the UK in 2022, while India is trading with 27 countries using its rupee rather than the dollar; hence, it coincidentally represents its expanding influence in global trade. The country also accounts for 46% of global digital transactions. India's population growth and young demographics are the key drivers to economic expansion that remains indemissible.
The IMF predicts that nominal GDP is projected to hit $4.339 trillion by 2025, surpassing Japan with $4.310 trillion. This outlook shows India on an exceptional growth trajectory, offering it a remarkable lead over Japan.
Economists bring to the fore that, on the other hand, Japan faces an event of recurring recessions and fails to come out from deflation for decades. The blight is worsened for Japan by its ageing population, low productivity in various sectors, and a weakened yen that badly affects its position in these rankings. Additionally, structural reforms have been a failure in Japan as people are unwilling to change and embrace digitalisation. Long-serving employees are more in favor of old practices rather than new methods of management.
Until 2023, for decades, Japan's growth lagged at only 1.9 per cent. As projected by the IMF, it is going to be just 0.3 per cent growth in 2024. China and Germany have already surpassed Japan, which had held the 2nd undisputed rank of the world till 2010.
India's influence in multilateral diplomacy, and global and regional security in the last decade becomes an indication of the nation's trajectory as an economic force. India has even pushed Japan to the side and taken the 3rd spot in the Asia power index, reflecting its growing geopolitical stature. "India is outshining its advanced peers in terms of economic capability, military capability, and diplomatic influence.". What is heartening is that the county is near breaching Japan and leapfrog to the fourth position in the world, going beyond the timeline of projections from multilateral agencies concerning global growth with rapid growth," a senior official remarked.
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