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India set to overtake Japan as world’s fourth-largest economy in 2025: IMF

Northeast NewsbyNortheast News
May 6, 2025
in Business
India set to overtake Japan as world’s fourth-largest economy in 2025: IMF
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New Delhi: India is projected to surpass Japan and emerge as the world’s fourth-largest economy by 2025, according to the latest World Economic Outlook released by the International Monetary Fund (IMF).

The report estimates India’s nominal GDP to reach $4.19 trillion next year, marginally ahead of Japan’s forecasted GDP of $4.18 trillion.

Maintaining its position as the fastest-growing major economy globally, India is expected to record growth exceeding 6 percent annually over the next two years—making it the only major economy with such a forecast.

In contrast, Japan’s economy is anticipated to slow significantly, with growth stagnating at just 0.6 percent in both 2025 and 2026, largely due to the adverse effects of ongoing global trade tensions.

Looking further ahead, India is on track to leapfrog Germany by 2028, with its GDP expected to rise to $5.58 trillion, positioning it as the third-largest economy globally.

Germany, which is projected to experience zero growth in 2025 and a modest 0.9 percent uptick in 2026, is forecast to have a GDP of $5.25 trillion by 2028.

The country is anticipated to face some of the most severe economic impacts among European nations from the continuing trade disruptions.

Meanwhile, the United States is expected to retain its lead as the world’s largest economy with a GDP of $30.5 trillion in 2025, followed by China at $19.2 trillion.

However, the U.S. economy is projected to slow down, with growth dipping to 1.8 percent in 2025 and 1.7 percent in 2026, reflecting the broader global economic uncertainty triggered by its trade policies.

The Eurozone is also facing a slowdown, with growth expected to fall to 0.8 percent in 2025 before recovering slightly to 1.2 percent in 2026.

Among key European economies, France is predicted to grow by 0.6 percent in 2025 and 1 percent in 2026.

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Spain is forecast to outpace its regional peers with a growth rate of 2.5 percent in 2025, though it may decelerate to 1.8 percent the following year.

The UK is expected to post moderate growth, at 1.1 percent in 2025 and 1.4 percent in 2026.

The IMF report highlights the shifting dynamics of the global economic landscape, with emerging markets like India playing an increasingly central role in driving global growth.

Tags: IMFIndiaJapanRankWorld's economy
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