IMF says India's GDP will hit $5 trillion in FY29

According to the International Monetary Fund (IMF), India may only become a $5-trillion economy in FY29. According to data from the IMF's World Economic Outlook Database, India's nominal GDP is seen rising to $4.92 trillion in FY28.

In the following year, the GDP will cross the $5-trillion mark. Also, the IMF forecasts that India's nominal GDP is expected to grow 13.4 percent in FY23 in rupee terms. In US dollar terms, the nominal GDP growth in FY23 is forecast at 8.2 percent.

The difference between the two nominal growth rates is down to the change in the exchange rate, with the rupee seen depreciating to 81.5 per dollar in FY23 from 77.7 per dollar in FY22. The IMF's numbers indicate India's real GDP growth will decline to 6.2 percent in FY28.

The IMF's forecasts for India's nominal GDP in dollar and rupee terms are such that the rupee's exchange rate works out to be 94.4 per dollar in FY28.

During the Budget 2022 session, Chief Economic Adviser V Anantha Nageswaran said, “If we continue to retain the path of 8 percent of real GDP growth, it will translate into even 8 percent dollar GDP growth. If we extrapolate it, we should be a $5-trillion economy in terms of nominal GDP in the financial year 2025-26 or the financial year 2026-27.”

Chief Economic Adviser V Anantha Nageswaran had expressed hope that India would become a $5 trillion economy by FY25 or the next year on the back of 8-9% sustained growth. Former Reserve Bank Governor C Rangarajan late last year said that India needs to grow at 9% per annum for the next five years in order to achieve that.