Can India Hit the USD 55 Trillion Economy Mark by 2047? IMF's KV Subramanian Thinks So

IMF Executive Director KV Subramanian suggests India can become a USD 55 trillion economy by 2047 if it maintains an 8% annual growth rate. He compares this to other forecasts and explains the necessary economic conditions for achieving this ambitious target.

KV Subramanian, the Executive Director of the International Monetary Fund (IMF) and former Chief Economic Advisor of India, stated on Thursday that India could evolve into a USD 55 trillion economy by 2047 if it sustains an 8% annual growth rate. Speaking exclusively to ANI, Subramanian remarked, "I'm predicting India to become a USD 55 trillion economy if it can grow at 8% per annum from now until 2047 when we celebrate the 100th year of independence."

Subramanian acknowledged that this projection is ambitious in comparison to other forecasts, such as Ernst & Young's estimate of USD 26 trillion for 2047 or Goldman Sachs' figure of USD 50 trillion by 2075. He highlighted that considering the broad macroeconomic drivers, including the post-2016 inflation-targeting measures that lowered inflation by at least 2% on average, this reflects a significantly lower depreciation of the rupee against the dollar, making the USD 26 trillion projection an underestimate when compounded.

Delving into the specifics of the USD 55 trillion target, Subramanian explained that assuming an 8% growth rate in real terms with a 5% inflation rate—which has been consistent since 2016—translates into a 13% growth rate. Adding a reduced currency depreciation rate of 1% due to lower inflation compared to the historical average of 3%, the growth rate would effectively be 12%. This implies a doubling of GDP every six years. "In dollar terms, India's GDP, which was USD 3.28 trillion in 2023, will double four times by 2047, reaching approximately USD 55 trillion," he said.

Subramanian also noted that by 2047, only the U.S. and China would be ahead of India, with India's per capita income projected to be USD 40,000. He emphasized that with 8% growth and controlled inflation, India could realistically achieve the goal of becoming a USD 55 trillion economy by 2047. (ANI)

(With inputs from agencies.)