Indian economy to almost equal US by 2050: study

(21-Nov-2009)

India will be the third largest economy in the world after China and United States by 2050, according to the Carnegie Endowment for International Peace, a reputed US-based foreign policy think tank.

An article titled 'The G20 in 2050', carried in the November bulletin of the institute said, "China, India, and the United States will emerge as the world's three largest economies in 2050. Their total GDP, in real US dollar terms, will be over 70 per cent more than that of the other G20 countries combined."

Other main findings say that China will become the world's largest economy in 2032, and grow to be 20 per cent larger than the United States by 2050. Over the next 40 years, nearly 60 per cent of G20 economic growth will come from Brazil, China, India, Russia, and Mexico.

Growing at a projected rate of 6.19 per cent between 2009 and 2050, India would grow most rapidly among the G-20 group of world's leading economies, the making Indian economy 97 percent as large that of the US in terms of purchasing power parity (PPP), two writers of the article said.

The article further said that in dollar terms, India's GDP is expected to increase by 16 times from the current $1.1 trillion to $17.8 trillion by 2050. ''The world's economic balance of power is shifting dramatically,'' noted the writers Uri Dadush, the director of Carnegie's international economics programme, and Bennett Stancil, a junior fellow in the programme.

But the study warns that despite impressive GDP growth in the developing world, relative per capita GDP will remain low, and wide disparity in per capita GDP among these countries will persist, the study says.

By 2050, the United States and Europe, long the traditional leaders of the global economy, will be joined in economic size by emerging markets in Asia and Latin America, they wrote.

Over the next 40 years, the G20 GDP is expected to grow at an average annual rate of 3.6 per cent, rising from $38.3 trillion in 2009 to $161.5 trillion in 2050, in real US dollar terms. Nearly 60 percent of this $123 trillion expansion will come from Brazil, Russia, India, China and Mexico (BRIC+M), Dadush and Stancil projected.

Of the G20 countries, though India is predicted to grow most rapidly, its current modest size will prevent it from surpassing either China or the United States in real US dollar terms.

A growing population - India is expected to become the world's most populous nation in 2031 - and an average exchange rate appreciation of 0.9 per cent per year will push annual GDP growth to an average of 6.2 per cent, the two experts said.

Courtsey : http://www.domain-b.com/economy/general/20091121_indian_economy_oneView.html