India Poised to Overtake Japan as World's 4th-Largest Economy in 2025: IMF Report
India is set to become the world's fourth-largest economy in 2025, overtaking Japan, as per the recent IMF World Economic Outlook report. India's nominal GDP is set to increase to $4,187.017 billion, just slightly ahead of Japan's GDP at $4,186.431 billion. This is a key milestone for India, which remains the fastest-growing large economy, set to grow over 6% in the next two years.
The IMF report emphasizes India's strong economic performance, led by domestic growth and resilience in the face of international economic adversity. Conversely, Japan, which is struggling with stagnation, is projected to achieve a modest 0.6% growth both in 2025 and 2026. This deceleration is caused by continued global trade tensions, which are predicted to significantly weigh on Japan's economic performance.
India's fast-paced growth path will continue, and its GDP is likely to reach $5,584.476 billion by 2028, allowing it to surpass Germany to become the world's third-largest economy. Germany, also caught in the crosshairs of the global trade war, is likely to experience minimal growth over the next few years, with its GDP standing at $5,251.928 billion in 2028.
The report also presents the economic performance of other major economies. The United States, the world's largest economy, is predicted to experience decelerating growth, with a growth rate of 1.8% in 2025, further dropping to 1.7% in 2026. On the other hand, China's GDP is estimated at $19,231.705 billion in 2025, remaining the second-largest economy.
The economic picture in Europe is weak, with the Euro Area predicted to grow by only 0.8% in 2025, before a slow recovery to 1.2% in 2026. The best-performing European nation is Spain, which is predicted to register a 2.5% growth in 2025, before slowing to 1.8% in 2026.
Globally, the IMF's outlook presents a vision of realigning economic power, with India's emergence symbolizing a major turning point in the world economic map.
