The world’s second most populous nation overtook the United Kingdom in the last quarter of 2021 and has continued to widen its lead ever since, according to a Bloomberg analysis of International Monetary Fund (IMF) data.
It marks a watershed moment for the former British colony, propelling it into the world’s top five economies in nominal dollar terms.
While British growth was subdued in the first quarter of this year and output is expected to contract in coming months, India is the world’s fastest-growing economy and domestic demand is booming.
Deloitte forecasts from July suggested India’s growth would average 6-7% a year over the next few years and suggest it could become a driver of global growth as major Western nations head into recession.
Its shares also rebounded strongly, with the S&P BSE Sensex jumping 11 percent this quarter, making it the world’s best performer among national benchmarks in countries with a market capitalization of at least $1 trillion, according to Bloomberg. The increase puts it in second place in the MSCI Emerging Markets index, just behind China.
While India ranked as the 11th largest economy just 10 years ago, its rapid expansion is likely to strengthen its lead over the UK even further in the coming years.
The UK’s incoming prime minister – likely Liz Truss – will face a game of economic conflict after coming through the Tory leadership contest on Monday.
UK inflation is at its highest level for 40 years, with the Resolution Foundation predicting the biggest squeeze on living standards for a century, with real household disposable income falling by 10% this year and next.
Rising energy bills threaten to bankrupt small businesses and push two-thirds of UK households into fuel poverty by January.
