LONDON: Britain has overtaken India as the sixth-largest economy in the world. In the final three months of 2021, India overtook the UK to overtake it as the fifth-largest economy. India increased its lead in the first quarter of the computation, which is based on US dollars, as per IMF GDP data.
This announcement is a fresh setback for the London government as it struggles to adjust to a severe cost-of-living shock, as per Bloomberg.
According to the International Monetary Fund's own projections, India will surpass the UK in dollar terms annually this year, leaving the Asian giant just behind the US, China, Japan, and Germany. India was the eleventh-largest economy ten years ago, while the UK was the fifth-largest.
The UK's decline down the international rankings is an unwelcome backdrop for the new Prime Minister. On Monday, members of the Conservative Party will elect Boris Johnson's replacement. Foreign Secretary Liz Truss is predicted to defeat former Chancellor of the Exchequer Rishi Sunak in the final round of voting.
The winning candidate would lead a country that is experiencing its highest rate of inflation in four decades as well as growing chances of a recession that the Bank of England predicts could stretch well into 2024.
The Indian economy, on the other hand, is anticipated to expand by more than 7 percent this year. Indian stocks have recently had a global-beating recovery, moving their weighting into second place in the MSCI Emerging Markets Index, only behind China's.
The calculations were done using the International Monetary Fund database and historic exchange rates on the Bloomberg terminal.
Since then, the UK has likely declined even more. In the second quarter, the UK's GDP increased by only 1 percent in real terms and decreased by 0.1 percent after accounting for inflation. With the pound losing 8 percent against the rupee this year, sterling has underperformed the dollar relative to the Indian currency.
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