“Based on our existing forecasts, we had expected India to overtake Japan in 2026,” said Marcel Thieliant, head of Asia-Pacific for Capital Economics, who added that the forecasts are currently being reviewed in light of recent events,
Japan Times reported.The International Monetary Fund sees the switch happening in 2025. S&P Global Ratings is looking at 2030 for the two countries to swap places.
Japan was the world's second-largest economy until 2010, when it was overtaken by China. Earlier this year, Germany’s economy became bigger than Japan’s.
The next switch is very much in the cards as population growth makes India’s relative ascent all but inevitable.
In 2023, India’s GDP was $3.55 trillion compared with Japan’s $4.22 trillion, according to World Bank calculations based on the value of the dollar at the time. The IMF forecasts 7.0% growth for India in 2024 and 6.5% in 2025. It sees 0.3% growth for Japan this year and 1.1% next year.
“Realistically, there is no obvious reason why India should not be able to grow by 6% to 7% per year, in real terms,” said Louis Kuijs, chief economist for Asia-Pacific at S&P Global Ratings.
If the trend holds, India will have a larger GDP than Japan in the next few years. It could also soon overtake Germany and take the No. 3 spot below the United States and China.
