TOKYO (Diya TV) — The International Monetary Fund predicts that within the next two years, India will outstrip Japan in gross domestic product. Latest prognostications say that by 2025, India’s GDP will surpass Japan’s, led by India’s dynamo economic growth, and by Japan’s stagnant economy and declining currency.
The IMF projects the Indian economy to grow at 7% in 2024, while the Japanese economy is going to expand merely at 0.3%. Experts like Marcel Thieliant, Asia-Pacific head for Capital Economics, argues India’s growth trajectory might make this shift earlier than what has been predicted.
The third-largest economy in the world – the Japanese economy – has experienced the perils of slow recovery, demographic decline, and unabated pressures on it through deflation. On the other hand, India is experiencing sound growth in manufacturing, technology, among many others, and a growing workforce to support it.
S&P Global Ratings is also more cautious in its forecast, which envisages India to surpass Japan around 2030. The economic prospects of the two economies can change, however, as external factors, such as inflation around the world and shifts in trade patterns, will also influence the trends.
Part of a larger reallocation of economic power in the world to the emerging markets, India’s economic rise comes at the back of Japan whose increasingly elderly population and low domestic consumption threatens to weigh it down while younger Indian working population supplemented by increasing investment in infrastructures holds strong promise for India.
Such a GDP milestone may mark the bellwether of India’s growing global influence; nonetheless, both countries have vast hills to cross to come out successful in their economies. Besides the many problems that India is still facing – such as low income inequality and infrastructure gaps, Japan is experiencing the so-called deflation, which hinders its very slow growth.
