India’s economy is set to overtake the UK in size in the next two years as the second largest country by population continues its heady pace of development, according to a new study.
France’s GDP will also rise above the UK’s for the next five years, according to forecasts in the World Economic League Table, compiled by the Centre for Economics and Business Research (Cebr).
The UK is currently the fifth largest economy in the world, according to the World Bank’s 2015 data, with GDP of more than $2.8 trillion (around £2.3 trillion). However, this does not take into account the effects of sterling’s steep fall in the wake of the EU referendum.
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The rankings, based on forecasts of GDP size, show emerging market economies gradually pushing past European nations as their wealth rapidly increases.
India’s heady annual growth rate, at 7.3 per cent, is higher than China’s, which should see it rise to be the third largest economy by 2024 – below only China and the US.
Korea is set to join India above the UK by 2030, while Brazil could also overtake as it recovers from a sharp slowdown.
The forecasts also assume a fall in trade, as services sectors grow even further in developed nations and new labour-saving technologies – 3D printing and robotics among them – reduce the advantage of outsourcing to countries with cheap wages.
Rankings for GDP per capita are still dominated by Europe, North America, and Japan, but globalisation is fuelling the rise of consumers in developing nations at an unprecedented pace. Wealth per citizen in China and India was growing at 6.4 per cent and 6.3 per cent respectively in 2015, according to the World Bank.
Douglas McWilliams, president of Cebr, said: “The World Economic League Table tracks the pace of globalisation as the former leading economies from the West get overtaken by fast growing emerging economies.
“China continues to be on track to become the world’s largest economy. India is now growing faster than China and will reach number three by 2024,” added McWilliams.