India to be third largest economy by 2050

By siliconindia   |   Monday, 23 November 2009, 21:21 IST   |    7 Comments
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India to be third largest economy by 2050
Washington: With the world's economic powers shifting dramatically, India will be the world's third largest economy after China and the U.S., says a new study from the Carnegie Endowment's International Economics Programme. The study also says that India is the country predicted to grow most rapidly in the G-20 formation. India is slated to grow at an average 6.19 percent over the next 40 years in comparison to China's 5.56 percent and the U.S.'s 2.7 percent. India's GDP will balloon to $17.8 trillion by 2050, that is, 16 times its current $1.1 trillion level. And, India's PPP GDP (gross domestic product calculated in terms of purchasing power parity) will be 97 percent as large as that of the U.S. by that year. Also, the study makes it clear that the U.S. will continue to be way above both India and China in terms of per capita income as the two Asian giants remain weighed down by the sheer size of their population, reports the Indian Express. Authored by Uri Dadush and Bennett Stancil of Carnegie Endowment's International Economics Programme, the study expands on previous projections by Goldman Sachs, PricewaterhouseCoopers and the World Bank. China is projected to become the world's largest economy in 2032, and grow to be 20 percent larger than the U.S. by 2050. "Over the next forty years, nearly 60 percent of G-20 economic growth will come from Brazil, China, India, Russia and Mexico alone. However, these emerging markets will not rise among the world's richest countries in per capita terms: their average income in 2050 will still be 40 percent below that of the G7 states today," as per the Carnegie experts. They believe the G-20's recent transformation into the world's principal economic forum highlights the beginning of a more integrated and complex economic era. "The extraordinary per capita wealth of the United States may actually work against its bid to lead, as the much lower per capita incomes in China and India will be perceived as more representative of the world population, potentially reinforcing their authority," the experts noted. The study's long-range projections, however, are not without their disclaimer. They are based on the assumption that "markets stay open, macroeconomic policies remain sound, and catastrophes do not occur."