"India is poised to surpass not only Japan and Germany but also the US to become the world's second largest economy by 2075" – CNBC quoted the latest report of the US financial group Goldman Sachs.
Today, India is the world's fifth largest economy, after Germany, Japan, China and the United States.
The main factor for Goldman Sachs to make the above prediction, in addition to the advantage of a growing population, is that India has achieved many achievements in innovation, technology, and investment, thereby increasing labor productivity.
India's technology industry revenue is expected to grow by $245 billion by the end of 2023, according to non -governmental trade association Nasscom. That growth will come from information technology, business process management and software product lines.
Employees work inside the Realme factory in Greater Noida, India. Photo: Bloomberg
"The dependency ratio of the Indian economy over the next two decades will be the lowest in the region," said Santanu Sengupta, India economist at Goldman Sachs.
A country's dependency ratio is measured by the number of dependents relative to its working-age population. A low dependency ratio indicates that there are many working-age people who are able to support children and the elderly.
The key to tapping India’s demographic potential is boosting labor force participation. “It’s really an opportunity for India to achieve its goal of building manufacturing capacity, continuing to develop services, infrastructure,” Sengupta said.
The Indian government has given priority to infrastructure development, especially in the road and rail sectors. India's recent budget aims to continue interest-free loan schemes for the next 50 years in state governments to boost investment in infrastructure.
The US financial group believes that this is the right time for the Indian private sector to scale up capacity building in manufacturing and services to create more jobs and absorb a large workforce.
Goldman Sachs also said that India's economic growth is driven by domestic demand, unlike many other economies that rely on exports. "60% of growth in India is driven by domestic consumption and investment," the report stressed.
India's Taj Mahal photographed at dawn. Photo: Wolfgang Kaehler
The forecast of the Indian economic boom was also made by financial consulting firm S&P Global and bank Morgan Stanley. These two American companies said that India will become the third largest economy in the world by 2030.
GDP Forecast to 2075
STT | Nation | GDP (trillion) |
1 | China | 57 |
2 | India | 52.5 |
3 | America | 51.5 |
4 | Eurozone | 30.3 |
5 | Japan | 7.5 |
(Source: Goldman Sachs Research)
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