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India's GDP to hit $5 trillion in FY29 Indian Economy

India's GDP to hit $5 trillion in FY29

India Blooms News Service | @indiablooms | 04 May 2022, 08:40 pm

India will become a $5 trillion economy only by 2029, four years later than the target set by Prime Minister Narendra Modi.

IMF's World Economic Outlook Database updated last month shows that India's nominal GDP is seen rising to $4.92 trillion in FY28.

The IMF's estimates for India are only till FY28.

Finance ministry officials have already said that India's target of a $5 trillion economy may be delayed by a year or two.

"If we continue to retain the path of 8 percent of real GDP growth, it will translate into even 8 percent dollar GDP growth. If we extrapolate it, we should be a $5-trillion economy in terms of nominal GDP in the financial year 2025-26 or the financial year 2026-27," Chief Economic Adviser V Anantha Nageswaran had said on February 1.

According to the IMF forecasts, India's nominal GDP is expected to increase 13.4 percent in FY23 in rupee terms.

In US dollar terms, the nominal GDP growth in FY23 is forecast at 8.2 percent.

The difference between the two nominal growth rates will depend on the change in the exchange rate, with the rupee seen depreciating to 81.5 per dollar in FY23 from 77.7 per dollar in FY22.

The IMF's forecasts for India's nominal GDP in dollar and rupee terms are such that the rupee exchange rate works out to be 94.4 per dollar in FY28.

Last month, the IMF cut its GDP growth forecast for India for the current financial year to 8.2 percent. 

But the RBI, for instance, has forecast that the GDP growth will fall to 7.2 percent in FY23 and further to 6.3 percent in FY24.

The IMF's numbers indicate India's real GDP growth will decline to 6.2 percent in FY28.

In fact, the IMF's forecasts for India's nominal GDP in dollar and rupee terms are such that the rupee's exchange rate works out to be 94.4 per dollar in FY28.

The RBI, for example, has predicted that the GDP growth will be down to 7.2 percent in FY23 and further to 6.3 percent in FY24.

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