UK economy lags behind India as recession looms
India has overtaken the UK as the world’s fifth largest economy as Britain teeters on the brink of recession.
The world’s second most populous nation overtook the UK in the last quarter of 2021 and has since steadily increased its lead, according to an analysis of International Monetary Fund (IMF) data by Bloomberg.
It marks a turning point for the former British colony, propelling it into the top five economies in the world in terms of nominal dollars.
While UK growth was sluggish in the first quarter of this year and output is expected to contract in the coming months, India is the fastest growing economy in the world and domestic demand is booming. boom.
Deloitte’s July forecast suggests India’s growth will average 6-7% a year over the next few years and suggests it could become an engine of global growth as major Western countries head towards a slowdown.
Its shares have also rebounded strongly, with the S&P BSE Sensex jumping 11% this quarter, making it the world’s best performer among national benchmarks in countries with a market value of at least $1 trillion. , according to Bloomberg. The increase puts it in second place in the MSCI Emerging Markets Index, just behind China.
While India was ranked the 11th largest economy just 10 years ago, its rapid expansion is likely to further strengthen the lead over the UK in years to come.
The UK’s new Prime Minister – likely Liz Truss – will face some economic mole play after running through the Tory leadership race on Monday.
UK inflation is at its highest level in 40 years, with the Resolution Foundation predicting the biggest squeeze in living standards for a century with real household disposable income falling by 10% this year and next.
Rising energy bills threaten to put small businesses out of business and push two-thirds of UK households into fuel poverty by January.