India's Journey to a $30 Trillion Economy by 2047 S&P predicts that emerging markets will average 4.06 per cent GDP growth through 2035, compared to just 1.59 per cent for advanced economies.
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India is on track to become the world's third-largest economy by 2030, as per S&P Global Ratings. Currently the fifth-largest economy at $3.6 trillion, India has ambitious plans to grow its economy to $30 trillion by 2047. However, with rapid population growth, the country faces significant challenges in meeting basic service needs and maintaining productivity.
S&P's report, "Look Forward Emerging Markets: A Decisive Decade," highlights India's potential to continue as the fastest-growing major economy over the next three years. India's 2024 inclusion in JP Morgan's Government Emerging Market Bond Index is expected to boost government funding and open up new resources within domestic capital markets. However, S&P cautioned that while this is a positive development, it is only the beginning—investors will require improved market access and better settlement procedures.
Emerging markets, including India, are expected to play a crucial role in shaping the global economy over the next decade. S&P predicts that emerging markets will average 4.06 per cent GDP growth through 2035, compared to just 1.59 per cent for advanced economies. By that time, emerging economies will account for approximately 65 per cent of global growth, with India firmly establishing itself as the world's third-largest economy. Other notable emerging markets like Indonesia and Brazil are projected to rank eighth and ninth, respectively.
Despite these promising forecasts, India faces challenges, especially with a rapidly expanding population. By 2035, India is expected to have the largest population in the world, adding pressure on the government to improve basic services like healthcare and education. This growth also intensifies the need for significant investments in infrastructure and technology to maintain productivity and keep pace with the global economy.
India has already taken steps to address its weak fiscal flexibility by increasing capital expenditure, which is vital for supporting long-term growth. However, S&P stressed that the country's future will heavily depend on how well its government designs and implements long-term growth strategies. Policymakers need to focus on mobilizing capital and investment in strategic areas while partnering with the private sector.
Moody's Ratings also noted that India's rapid economic growth will drive up demand for carbon-intensive products, such as automobiles, despite progress in renewable energy development. Moody's projects India's GDP to grow by 7.2 per cent in 2024 and 6.6 per cent in 2025, maintaining its status as one of the fastest-growing economies globally.
