India will become the third largest economy by FY28, which is two years earlier than projected, according to SBI Research economists, as cited by The Economic Times. It further said that India will surpass the economies of Japan and Germany at the current growth rate and will account for 4% share in the global GDP.
“The Indian economy continues to enjoy a period of sustained goldilocks," SBI Research economists said. They also added that India will likely grow 8.1% in the first quarter of FY24, pushing the overall growth rate to 6.5%.
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According to SBI projections, India will also cross the $5 trillion mark as it will become the third largest economy in the world.
India recorded a 13.5% growth in the first quarter of FY23, as compared to RBI’s growth projections of 6.5% in FY24 and International Monetary Fund (IMF) revised forecast of 6.1%. Earlier this week, the IMF revised its growth forecast upwards by 0.2 percentage points on the back of strong domestic investment.
PM Modi on Wednesday also stated that the country will become the third largest economy during his third tenure in office.
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SBI Research economists further said that India will need to log 11-11.5% nominal growth annually to achieve this goal, which is said to be achievable with 6.5-7% growth.
"We believe that in a world that is ravaged by uncertainties, 6.5-7% growth is the new normal. The current estimates may undergo an upward revision with the right policy perspective and realignment in global geopolitics.," they said.
It further added, “In coming days, as macroeconomic prospects steadily improve, India will dynamically seek fuller expression of its full potential and a transformative change in its global position,"
The SBI economists further projected Uttar Pradesh and Maharashtra to cross the $500 billion mark each by FY28, accounting for nearly a fourth of India's total GDP.