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India’s Economy Now Larger Than the United Kingdom’s

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For the first time in 150 years, the economy of India is larger than that of the United Kingdom, their former colonial masters. The change has happened several years ahead of schedule, given the rapid growth experienced by the sub-continent in the past 25 years, while the United Kingdom has been held back by the aftermath of the global recession. Exactly five years ago, the Centre for Economics and Business Research (CEBR) had predicted that India would surpass the United Kingdom’s economy by 2020, to become the fifth largest economy in the world. “Once expected to overtake the UK GDP in 2020, the surpasso has been accelerated by the nearly 20 per cent decline in the value of the pound over the last 12 months, consequently UK’s 2016 GDP of GBP 1.87 trillion converts to $2.29 trillion at exchange rate of GBP 0.81 per $1, whereas India’s GDP of INR 153 trillion converts to $2.30 trillion at exchange rate of INR 66.6 per $1,” the report said. The report first published in Forbes magazine, also credited the slide of the pound by nearly 20 percent in the past 12 months to the placement switch, due mainly to the decision to leave EU.

“Once expected to overtake the UK GDP in 2020, the surpass has been accelerated by the nearly 20 per cent decline in the value of the pound over the last 12 months, consequently UK’s 2016 GDP of GBP 1.87 trillion converts to $2.29 trillion at exchange rate of GBP 0.81 per $1, whereas India’s GDP of INR 153 trillion converts to $2.30 trillion at exchange rate of INR 66.6 per $1,” the report said. Given the advantage is due to the exchange rate, the report did expatiate that it was only a temporary excuse.
“Furthermore, this gap is expected to widen as India grows at 6 to 8 per cent p.a. compared to UK’s growth of 1 to 2 per cent p.a. until 2020, and likely beyond. Even if the currencies fluctuate that modify these figures to rough equality, the verdict is clear that India’s economy has surpassed that of the UK based on future growth prospects,” the report further stated. The Union Minister of State for Home Affairs Kiren Rijiju went on Twitter to congratulate his country’s achievement.  “India overtakes UK & becomes 5th largest GDP after USA, China, Japan & Germany.” He tweeted.

 

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