According to S&P Global Ratings, India is on track to become the third largest economy in the world by 2030. However, the country’s rising population poses significant challenges in providing basic services and meeting investment needs to keep the economy productive.
India aims to grow from its current economy size of $3.6 trillion to a massive $30 trillion by 2047. Currently, India ranks as the fifth largest economy globally.
S&P highlights that India is expected to be the fastest-growing major economy over the next three years. The country’s entry into JP Morgan’s Government Emerging Market Bond Index in 2024 could lead to more government funding and open up important resources in local capital markets. This is just the beginning, as investors will be looking for better access to markets and streamlined processes.
In their report, “Look Forward Emerging Markets: A Decisive Decade,” S&P states that emerging markets will play a key role in the global economy, with an expected average growth rate of 4.06% from now until 2035, compared to just 1.59% for advanced economies. Notably, countries like India, China, Vietnam, and the Philippines will drive this growth.
By 2035, S&P predicts that India will firmly hold its place as the third-largest economy, while Indonesia and Brazil will rank eighth and ninth, respectively.
To support long-term growth, India is working on improving its financial flexibility by increasing capital spending. However, the challenges posed by its growing population cannot be overlooked, as India is projected to have the largest population in the world by 2035. This will create demands for better basic services and increased investments to keep the economy thriving.
S&P emphasizes that the economic growth of emerging markets in the coming decade will largely depend on how effectively their governments design and implement long-term growth strategies. Setting clear and ambitious goals will help guide progress and encourage both public and private investments.
