ravishingravi Posted May 31, 2013 Posted May 31, 2013 LONDON: India has probably surpassed Japan to become the world's third largest economy after the US and China, Paris-based think-tank OECD said today even as it lowered the country's economic growth projection for 2013 to 5.3 per cent. "China will likely pass the United States as the world's largest economy in the next few years and India has probably recently surpassed Japan to be third largest," said the OECD Economic Outlook report. Until around 2020, China is set to have to highest growth rate among major countries, but could be then surpassed by India, it further said. OECD also said that by early 2030s, the BRIICS' (Brazil, Russia, India, Indonesia, China and South Africa) combined GDP should roughly equal that of the OECD (based on current membership), compared with just over half that of OECD now. "Between now and 2060, GDP per capita is seen to increase more than 8-fold in India and 6-fold in Indonesia and China," it added. The Organisation for Economic Cooperation and Development (OECD), which in November had projected India to grow at 5.9 per cent in 2013, cautioned that structural bottlenecks in the country could further constrain investment and growth potential. "GDP growth is projected to rise gradually over the next two years... Significantly more growth would be forthcoming if structural bottlenecks were swept away by fundamental structural reforms," the report said. Looking ahead, it said India is likely to improve growth to 6.7 per cent next year, after having logged a decade's low of 3.8 per cent in 2012. OECD said the world real GDP is projected to increase by 3.1 per cent this year and by 4 per cent in 2014. Across OECD countries, GDP is projected to rise by 1.2 per cent this year improve to 2.3 per cent in 2014. Growth in non-OECD countries will rise by 5.5 per cent this year and 6.2 per cent in 2014. In the US, activity is projected to rise by 1.9 per cent this year and by a further 2.8 per cent in 2014, OECD said. GDP in the euro area is expected to decline by 0.6 per cent this year and then rebound by 1.1 per cent in 2014. Japan's GDP is expected to grow by 1.6 per cent in 2013 and 1.4 per cent in 2014, it added. Talking about India's neighbour China, OECD forecast that its economy would grow 7.8 per cent this year, down from a previous estimate of 8.5 per cent. Referring to India, it also said the fiscal tightening and the new fiscal consolidation roadmap are "welcome and should allow monetary policy to be eased further". http://economictimes.indiatimes.com/news/economy/indicators/india-probably-worlds-3rd-largest-economy-oecd/articleshow/20335092.cms?utm_source=facebook&utm_medium=economictimes
zumi Posted May 31, 2013 Posted May 31, 2013 i m guessing this is based on purchasing power parity. on nominal value (face to face comparison of gdp) India is still something like 9th or 10th biggest, Japan and CHina is three times bigger than India, and the US is like seven times bigger than India. This reflects India's poor international trade. The GDPs of Brazil, France, UK, Germany and Italy are also bigger than India.
ravishingravi Posted May 31, 2013 Author Posted May 31, 2013 i m guessing this is based on purchasing power parity. on nominal value (face to face comparison of gdp) India is still something like 9th or 10th biggest, Japan and CHina is three times bigger than India, and the US is like seven times bigger than India. This reflects India's poor international trade. The GDPs of Brazil, France, UK, Germany and Italy are also bigger than India. Size of economy is usually in terms of PPP.
Muloghonto Posted May 31, 2013 Posted May 31, 2013 Size of economy is usually in terms of PPP. Both matter. PPP is 'effective value' of money inside an economy. Ie, how much is $5 going to get you ? Based on where you are, it differs ( ie, a $5 wont even buy you a sandwich in USA but it will buy you a full course meal in India). Not just for the dollar, even our Rupee has variable value- you get more 'raunch for your rupee' in Nepal than in India, where the IR 1 is worth roughly 1.15 or something. Nominal GDP is the 'real' amount of money you have. Ie, how many dollar bills you have, period. This matters in international trade and inter-bank stuff, because they don't care how much you can 'buy' for a billion dollars, its a billion dollars because the math behind the agreement (eg, loans with interest rates, etc) says so. As such, nominal GDP is what matters in international financial exchanges. PPP GDP matters when it comes to spending it inside your own economic sphere, aka your 'country' or 'free trade zone', depending on who regulates the economic picture.
ravishingravi Posted May 31, 2013 Author Posted May 31, 2013 ^Eh. Not really denying that. Just saying that PP is invariably used as benchmark for "size" of the economy. I didnt intend to put this post up as some great achievement for India. We have some very basic level issues.
Prakat Posted May 31, 2013 Posted May 31, 2013 The wording is less than satisfactory. India hasn't edged out Japan or zoomed ahead as is implied by "Surpassing". Our No. 3 position is more due to Japan's troubled economy which has been receding than any superlative growth in our own economy.
EnterTheVoid Posted May 31, 2013 Posted May 31, 2013 How is a country of Japan's size the world's third largest economy? I know they work like robots but still.
G_B_ Posted May 31, 2013 Posted May 31, 2013 old news this happened a while ago. since when is the OCED a marker when the IMF and World Bank exist? Those saying nominal matters are sort of missing the point. A country like Japan tries its best to deflate its currency to make its exports more valuable. Same for China. the yuan is currently at 6 while its market value in a free float should be at 3. In todays economy devaluation seems to be the biggest tool a country has
Sachin=GOD Posted May 31, 2013 Posted May 31, 2013 meanwhile figures released today showed India had its slowest GDP growth in 10 years...
Clarke Posted May 31, 2013 Posted May 31, 2013 Merely bragging rights in some forums; HDI & per capita figures are far more important.
Crookbond Posted May 31, 2013 Posted May 31, 2013 Merely bragging rights in some forums; HDI & per capita figures are far more important. THIS. May we see numbers about OECD on HDI? I believe we are only better than our padosis and some African poor nations.
Clarke Posted May 31, 2013 Posted May 31, 2013 There are some areas where the size does factor in, for instance pursuing big ideas such as space exploration or high end research. The Europeans manage to pull together quite well to overcome the relative lack of size when compared to US/China.
kubrickian Posted May 31, 2013 Posted May 31, 2013 For a 66 year old economy with each state resembling a country in itself with different religions, languages, castes, communities and so much corruption and so much over population, its a miracle that India has managed to remain a single country with a functioning democracy and become one of the top economies in the world. About 50 years ago, who gave India a chance ? Everyone said we would break up into 20 countries and there would be civil wars all over. But still here we are. :isalute:
don_corleone840 Posted May 31, 2013 Posted May 31, 2013 For a 66 year old economy with each state resembling a country in itself with different religions, languages, castes, communities and so much corruption and so much over population, its a miracle that India has managed to remain a single country with a functioning democracy and become one of the top economies in the world. About 50 years ago, who gave India a chance ? Everyone said we would break up into 20 countries and there would be civil wars all over. But still here we are. :isalute: india chances of being a developed country are as good as indian football team chances of winning worldcup
SLICKR392 Posted May 31, 2013 Posted May 31, 2013 In other news- We have dropped 5 places in the HDI ranking.
dial_100 Posted May 31, 2013 Posted May 31, 2013 Merely bragging rights in some forums; HDI & per capita figures are far more important. +1 HDI for sure should be our top priority. We need all inclusive growth. Creating economic disparity will lead to some serious issues in few years. besides out per capita figures will not improve until we work towards bringing the other sections of the society in growth equation. We have to use our 100% population. That way not only we will grow but we can sustain as well.
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