In a very upbeat estimation about the growth of Indian economy, the International Monetary Fund has indicated that India will be overtaking Germany by 2022 as the world’s fourth-largest economy and will be pushing the UK out of the top five economies of the world.
The IMF also warned of the challenges that Indian economy is facing in form of tax system, distressed assets, lackluster productivity, employment and infrastructure shortfall.
The IMF believes that the Indian economy is in process of recovering from the surprise demonetisation of large currency notes and the there will be more such disruption during the implementation phase uniform goods and services tax.
Many economic analysts are still concerned about the asset quality in the Indian banking system and debt status which is rated just above junk status by top rating agencies.
Issues such as bad loans, debt restructuring and NPA have been posing a strong challenge to to Prime Minister Narendra Modi’s government in reviving investment and boost employment.
However, IMF believes that the growth potential still remains due to consumption and demand in the economy.
IMF claimed that, “ranking countries and regions on their gross domestic product, for 2017 and 2022 based on IMF forecasts, India, growing at 9.9 percent a year in nominal terms, will surpass Germany by 2022 as the world’s fourth largest economy, with the U.K dropping out of the top five after 2017.”