Bank of America (BofA) Securities says India will be the world’s third-largest economy by 2031. The global financial institution said that India could be delayed by 3 years to achieve its ambitious target of becoming the world’s third-largest economy due to the crises caused by the COVID-19 Pandemic and that it The target can only be achieved by 2031-32. Let us know that PM Narendra Modi has set a target of making the Indian Economy $ 5 lakh crore by the year 2024-25.
The country’s gross domestic product (GDP) has already decreased by 15.7 percent over the previous year due to the Corona crisis. India is currently the fifth largest economy in the world. Bank of America Securities (BofA) said in a report, “Looking at the crisis caused by the epidemic, we now estimate that India’s economy will be the world’s third largest economy by 2031-32.” If India’s growth rate is 9%, then by 2031 (in US dollars) it will be equal to the GDP estimated at the market price of Japan and if the growth is 10%, then India will achieve this position in 2030.
The report is based on
However, neither the domestic economy nor the size of Japan’s economy has been mentioned in the report. By the way, in 2019-20, India’s economy was $ 2650 billion, while Japan’s economy was $ 4870 billion in 2020. According to the report, this assessment is based on the recognition of 6 percent growth on real basis, 5 percent inflation and 2 percent fall in the exchange rate of the rupee.
Earlier, BofA had predicted in 2017 that India would be the world’s third-largest economy by 2027-28. This estimate was based on assumptions such as population gains, increase in financial maturity and emergence of large markets.
In the report, economists of BofA said that all three elements are becoming stronger now. In addition, there are two other catalytic elements that support structural change. One of these is to achieve the appropriate level of foreign exchange reserves by the RBI in about eight years.
This should help keep the rupee stable by reducing the risk of the economy from global shaking. At the same time, the soft policy has brought down the real interest rate which was affecting the growth of the economy since 2016.
Oil price is a thorn in the way
According to the report, the only major risk in the way of sustainable growth is the price of oil, especially when it reaches above $ 100 a barrel. It said, in fact, our real growth rate of 6 percent is below the average of 6.5 percent growth expected from 2014 and our estimate of 7 percent.
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