The Indian economy, whose size is $2
trillion as of now, is poised to overtake the combined
GDP of Japan and Germany in the next four years on
the back of recent policy reforms and improved
business confidence in the country, IMF chief Christine
Lagarde said today.
“Indeed, a brighter future is being forged right before
your eyes. By 2019, the economy will more than double
in size compared to 2009. When adjusting for
differences in purchase prices between economies,
India’s GDP will exceed that of Japan and Germany
combined,” the IMF Managing Director said at a lecture
here.
“Indian output will also exceed the combined output of
the three next largest emerging market economies —
Russia, Brazil, and Indonesia. So clearly India’s weight
among the group of emerging markets will increase,”
she said.
“Recent policy reforms and improved business
confidence have provided a booster shot to economic
activity,” she said.
Using India’s new GDP series, the IMF expects growth
to pick up to 7.2 per cent this fiscal year and
accelerate further to 7.5 percent next year–making
India the fastest growing large economy in the world,
she added.
Asked if the International Monetary Fund (IMF)
believes new series of data, she said “conditionally”.
On whether the multilateral funding agency has sought
for some explanation on how the new series have been
arrived at she merely said, “yes”.
Elaborating on reasons for rapid economic expansion,
she said much of this has to do with population growth.
“More than 50 per cent of India’s population is at
present below the age of 25, and more than 12 million
people enter the labour market every year,” she said.
By 2030, Lagarde said India is expected to have the
largest labour force in the world.
At more than one billion people of working age, India’s
labour force will be larger than the combined labour
force in the United States, the euro area, and
Indonesia, she added.
“The potential benefits to be reaped from your
collective work efforts could be enormous. So, we
know India can run— judging by your cricket record. I
believe India can fly,” she said.
As India grows and takes its rightful place in the global
economy, the focus should remain on sound policies
and inclusive institutions, she said.
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