Senior Economist Martin Wolf States Western Countries Are Betting Big On India, Predicts GDP Growth – News18

India is expected to emerge as a significant “great power” and achieve an economy comparable in size to that of the U.S. by 2050. Popular economics commentator Martin Wolf believes that India can maintain an annual GDP per capita growth of around 5% until 2050, and with improved policies, this growth could be even higher or possibly lower. Western leaders are seen as making a reasonable bet on India’s potential.

Martin Wolf highlighted that India is a compelling choice for companies adopting a “China plus one” approach, considering its advantages over obvious competitors due to its substantial domestic market. India is currently the world’s fifth largest economy and third largest in terms of purchasing power, with a projected population of 1.67 billion by 2050 as per the United Nations to reach 1.67 billion by 2050. India’s current population stands at 1.47 billion at present.

Wolf emphasised that India’s bank balance sheets have been successfully repaired, and overall, the credit engine is now in a favourable state. Given the projections of rapid growth in both population and economy over the coming decades, India can serve as a significant counterbalance to China. For this reason, Wolf believes that building closer relations between Western countries, exemplified by Joe Biden’s warm reception of Prime Minister Narendra Modi in Washington and Emmanuel Macron’s welcoming approach in Paris, is a sensible strategy aimed at fostering a strong alliance with India, which is expected to become a potent counterweight to China’s influence.

According to Wolf, Western powers making a bet on India is indeed a wise decision, considering its potential as a rising great power and the alignment of interests. The extent to which values are shared remains a more uncertain aspect in this situation.

Apart from that, the International Monetary Fund (IMF) has projected that India’s economy will experience an annual growth rate of a little over 6% from 2023 to 2028. During this period, GDP per capita is anticipated to grow at a slightly slower pace, at approximately one percentage point less than the overall economic growth rate.

World Bank President Ajay Banga, during his visit to India on July 19, highlighted that the country’s economy benefits from a natural cushion against global slowdowns due to its reliance on domestic consumption. Since a significant portion of India’s GDP is dependent on local demand, it provides resilience to external economic challenges.