World Economic Outlook: The International Monetary Fund (IMF) has released the latest World Economic Outlook (WEO). According to the latest data, India has not fared well in the context of the Indian rupee’s exchange rate with the United States dollar and the country’s gross domestic product (GDP) in the local currency. Japan and the United Kingdom have overtaken India to reach the 4th and 5th spots, respectively.
This was after the IMF raised the real gross domestic product growth forecast for the country to 6.5 percent for FY27 when domestic estimates predicted a real growth in FY26 of 7.4 percent.
Interestingly, Niti Aayog CEO BVR Subrahmanyam had declared that the country has now overtaken Japan to become the world’s fourth-largest economy.
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World Economic Outlook-What Caused The Shakeup For India?
In February end, India updated its gross domestic product estimates with a new base due to concerns that the previous GDP series was overestimating GDP of the country. In terms of the Indian currency, the GDP of India was rolled back from Rs 357 trillion to Rs 345 trillion for 2025-26.
Secondly, the Indian rupee has lost its relative value to its US counterpart. Moreover, the US dollar has lost its sheen to the Japanese Yen and the British Pound. This means that the gap between the Indian GDP when compared to that of the United Kingdom or Japan expands even more.
Gaura Sengupta, chief economist, IDFC First Bank, commented that the rank change reflects a new base year of India’s GDP where the nominal gross domestic product is lower than the old base gross domestic product by 4 percent. Sengupta also remarked that the Indian rupee depreciated against the USD by 11 percent in FY26.
The Growth Path Ahead
India is now expected to overtake Germany by 2031, which would be a delay of 2 years than previous IMF estimates.
