India's GDP To Hit $5 Trillion Mark By 2026, Surpassing Germany And Japan: Arvind Panagariya

Former Niti Aayog vice chairman Arvind Panagariya on Friday (15 December) said that India is likely to become the world's third largest economy by 2026 as its GDP will reach $5 trillion in that year in current dollar terms.

While giving the 18th C D Deshmukh Memorial Lecture, titled 'India at 125: Reclaiming the Lost Glory and Returning the Global Economy to the Old Normal', he expressed doubts regarding the possibility of either Germany or Japan's GDP in current dollar terms surpassing the USD 5 trillion mark within the next three years.

He stated that Japan needs to maintain a 3.5 per cent growth rate in current dollar terms to increase its 2022 level of $4.2 trillion to $5.03 trillion by 2027.

He stated that with an annual growth rate of 4 per cent, Germany's GDP is projected to increase from $4.4 trillion in 2023 to $4.9 trillion in 2026, and further to $5.1 trillion by 2027.

"Given these estimates, how soon can the Indian GDP cross the GDPs of these two countries?.. that is the question," Panagariya said.

In terms of current dollar value, India has experienced an average annual growth rate of 10.22 per cent.

"At this rate, India's GDP in current dollars will reach $5 trillion in 2026 and $5.5 trillion in 2027. This means that there are good prospects that India will become the world's third economy by the end of 2026, sooner than nearly all current predictions," he said.

Panagariya emphasised that in order for India to reach its maximum potential, it must implement necessary measures to facilitate the expansion of its economic sectors.

"Small habitations, small farms, and small enterprises are intimately linked. Reforms that will help the enterprises in industry and services grow larger will create job opportunities for the masses, which will, in turn, pave the way for workers to migrate from rural to urban areas," he said, news agency PTI reported.