Kolkata: India has slipped in GDP (gross domestic product) rankings and now stands at the sixth place according to latest IMF estimates. The Global Economic Outlook report that IMF published earlier this week has estimated that India will probably clock a GDP of $4.15 trillion, which will be marginally below that of the UK. India is likely to wrap up FY27 with a GDP size of $4.15 trillion, while that if the UK will be $4.26 trillion. According to analysts, the decline in rankings could be attributed to the recent revision in base year. It has led to a downward movement of the nominal GDP. Another trigger for the decline in India’s position is on account of the decline in the value of the Indian rupee compared to the US dollar.
Reasons for India’s decline
“The change in the rank reflects new base year of GDP where nominal GDP is lower than old base GDP by 4%. Further rupee depreciated against the dollar by 11% in FY26. The combination resulted in the GDP ranking revision,” Gaura Sengupta, chief economist, IDFC First Bank has been quoted in the media as saying. Nominal GDP of India dipped from Rs 357 lakh crore in the old series to Rs 345.5 lakh crore in the new series.
Which countries are ahead of India
The latest IMP estimates has said that the US remains country with the top GDP of $32.3 trillion. China ranks second with $20.85 trillion. Germany is in fourth position with $5.45 trillion and in the fourth place comes Japan with $4.38 trillion GDP.
Macro economic fundamentals remain strong
However, India’s macroeconomic fundamentals have remained strong which are also going to offer a cushion to the impact of a oil price shock, and inflationary pressures, according to S&P Global Ratings. While it said “India isn’t immune to the shocks reverberating from the Middle East war. The pain of higher energy prices and supply disruptions may persist for months, crimping economic activity across households, corporations, and banks,” S&P Global Ratings also mentioned that strong corporate balance sheets, well-capitalised banks and a strong external position would offer cushion to the shock.