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Joy as India replaces UK as world’s 5th-largest economy, but analysts call for a ‘reality check’
- India cemented 5th place by posting first-quarter growth of 13.5 per cent. And its estimated US$854.7 billion economy is still growing
- But analysts say high unemployment, weak domestic consumption and a slowing global economy could curtail growth in the coming quarters
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Indians are rejoicing after the country overtook former colonial ruler Britain to become the world’s fifth-largest economy, but analysts have called for a “reality check”, saying more needs to be done to reduce unemployment and inequality.
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“The pleasure of surpassing Britain, which ruled over India for 250 years, supersedes the mere statistics of improved rankings … it’s special,” Prime Minister Narendra Modi said last week.
India cemented fifth place by posting first-quarter growth between April and June of 13.5 per cent, government data showed, streaking ahead of Britain whose economy shrank by 0.1 per cent during the same period.
As of March, India’s economy had grown to US$854.7 billion compared to Britain’s US$816 billion, according to calculations by Bloomberg using International Monetary Fund figures.
Business leaders also feted India’s achievement of pushing the UK into sixth place in the global rankings. “The law of karma works,” said Anand Mahindra, the billionaire chairman of the cars-to-finance Mahindra Group.
Some Indians have also compared the country’s expansion to that of China, which only grew by 0.4 per cent in the April-to-June quarter.
The achievement, which came as India celebrated 75 years of independence from Britain, marks the first time that the country has ranked among the world’s top five economies – behind only the US, China, Japan and Germany.
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