As countries like Germany, Japan and the UK continue to drop down in GDP (PPP) rankings over the years, India has achieved significant gains in GDP and the country’s share has been significantly increasing, a latest report has revealed.
GDP (PPP) means gross domestic product based on purchasing power parity.
According to research by Delhi-based nonprofit Social Policy Research Foundation (SPRF), as of 2024, the Indian economy, when seen at PPP, is 3.6 times that of the UK, 2.1 times that of Japan and 2.5 times that of Germany.
As of 2022, China emerged as the top-ranking country.
“However, the share of the Indian GDP (PPP) as a percentage of the Global GDP at PPP has been significantly increasing, while that of the US, Japan, Russia and other countries have decreased,” the report mentioned.
PPP allows us to understand and make comparisons between two countries about the price of the same goods and services in both countries.
“A high PPP implies that a basic set of essential goods and services is cheaper inside India, for an Indian consumer, than the same basket would be for a consumer in Japan, Germany or the UK,” according to the report.
India’s economy sprang a surprise with an 8.4 per cent surge in GDP growth during the third quarter (October-December 2023), as a result of which the country’s economic growth rate for the financial year 2023-24 is now estimated at a robust 7.6 per cent, according to latest figures by the National Statistics Office.
The high growth rate of 8.4 per cent has been driven by a double-digit growth in the manufacturing sector of 11.6 per cent, followed by a good growth rate of the construction sector (9.5 per cent).
“The Indian economy remained resilient with a robust 7.6 per cent growth rate of GDP in FY 2023-24 over and above 7 per cent growth rate in FY 2022-23,” the Ministry of Statistics said.
The latest data show that India is keeping up its growth momentum as the world’s fastest-growing economy that is seen as a bright spot amid the global slowdown.
According to the RBI’s monthly bulletin released earlier this week, the high visibility of structural demand and healthier corporate and bank balance sheets are likely to propel India’s growth going forward even as the global economy is losing steam.
In India, real GDP growth was at a six-quarter high in Q3 of 2023-24, powered by strong momentum, robust indirect taxes, and lower subsidies, the RBI bulletin stated.
