As India steadily recovered from the COVID pandemic, it surpassed the UK to become the world’s fifth largest economy on Friday.
According to IMF GDP figures for the first quarter, India maintained its lead in US dollars. Compared to India, the UK is the sixth largest economy in the world. It will not be a welcome development for the new prime minister when the UK’s international rankings fall. Boris Johnson’s successor will be chosen by Conservative Party members on Monday, with Foreign Secretary Liz Truss expected to beat former Chancellor of the Exchequer Rishi Sunak.
As the UK election approaches, the winner will inherit a nation facing the highest inflation in four decades and the possibility of a recession that may last well beyond 2024, according to the Bank of England. India’s economy, however, is expected to grow by more than 7% this year. This quarter, Indian stocks have risen to the second spot in the MSCI Emerging Markets Index behind only China. According to the IMF report, the UK’s economy has likely fallen even further since its GDP in cash terms grew 1% in the second quarter and shrank 0.1% after inflation was taken into account. Meanwhile, Sterling has also underperformed the dollar against the rupee this year, with the pound falling 8% against it. According to the IMF, India is expected to overtake the UK this year in dollar terms, putting the Asian powerhouse behind only the US, China, Japan and Germany. Ten years ago, India ranked 11th among the largest economies, while the UK ranked 5th.