The latest GDP of China, the United States and India: the United States exceeds 20 trillion US dollars, China exceeds 13 trillion US dollars, what about India?
Recent projections by the International Monetary Fund (IMF) suggest that India will become the world's third-largest economy by 2026.
In the first three quarters of 2023, economic data from various countries have been released one after another, and the GDP of the United States has exceeded 20 trillion US dollars, reaching 20,278 billion US dollars, a year-on-year increase of 2.5%. China's GDP was about US$130157 billion, up 5.2% year-on-year. So, how many are there in India?
On November 30, India released economic data for the third quarter, which was quite impressive, with GDP growing by 7.6% year-on-year, far exceeding expectations. In fact, since the beginning of this year, India's economic growth rate has not been low, with 6.1% in the first quarter and 7.8% in the second quarter. In the first three quarters, the year-on-year growth was 7.1%, and the GDP reached 214,144.29 billion rupees, about 2,599.5 billion US dollars.
The most important thing is that last year's base was not low, with growth rates of 4.1%, 13.5%, and 6.3% in the first to third quarters of 2022, respectively, and a year-on-year growth rate of 7.7% in the first three quarters.
The fact that India can maintain high growth from such a high base is enough to show that India's economic activity is very high. The growth rate of 7.1% also allows India to maintain its leading position among the world's major economies.
What is driving India's economic growth? According to the official figures, consumption and investment have the greatest credit. Taking the third quarter as an example, the three fastest-growing industries were manufacturing, construction, power and water supply and other public utilities, which increased by 13.9%, 13.3% and 10.1% respectively, and other industries also maintained good growth.
The growth in the manufacturing and construction sectors was mainly due to increased investment by the Indian government. On the one hand, subsidies are provided to companies wishing to establish production bases in India, which is still attracting a large amount of foreign investment due to its cheap labor and huge consumer market of 1.4 billion people, although India is known as a "cemetery for foreign investment".
Moreover, foreign investors and companies are trying to reduce their dependence on China and increase their investment in the Indian market, with American, Japanese and South Korean companies being the most active. Typical example, Apple, from 2021 to April this year, in just two years, Apple's iPhone production in India has increased rapidly from 1% to nearly 7%. It is estimated that by 2024, about 25% of the world's iPhones will be produced in India.
It is important to know that most of the iPhones were previously produced in China, and in the second half of 2024, India will start the trial production process of the iPhone 17, which will be the first time that Apple will develop and manufacture a new iPhone outside of China.
In order to meet the production capacity demand of the iPhone, Foxconn recently announced that it will invest $1.5 billion to build a factory in India.
On the other hand, India is spending heavily on boosting the country's infrastructure, increasing capital expenditure on airports, roads and highways, and other infrastructure projects to $122 billion, or 1.7% of India's gross domestic product (GDP), in the current fiscal year (April 2023-March 2024).
There is no doubt that India is following our past development path, attracting foreign investment, developing "Make in India", and improving logistics efficiency by strengthening infrastructure. India has big ambitions to become the next factory of the world.
India's export performance is also good, in the context of weak global trade, from January to June 2023, exports were 385.4 billion US dollars, an increase of 1.5%, of which service trade exports were 166.7 billion US dollars, an increase of 17.7%, which is quite a bright performance.
In October, India's merchandise exports rose 6.21 percent to $33.57 billion, while India's total merchandise exports will reach $111.2 billion in the fourth quarter, up 6.3 percent year-on-year, according to the Export-Import Bank of India.
India's total merchandise exports have remained above $100 billion for nine consecutive quarters since the second quarter of FY2022, reflecting the resilience of India's merchandise exports.
If you want to be the world's factory, you need someone to buy your stuff. To this end, India has signed free trade agreements with many economies and economic organizations, and has accelerated the conclusion of free trade agreements with Australia, the United Kingdom, Canada, Israel, the European Union and the Gulf Cooperation Council countries.
According to the RBI forecast, GDP growth will exceed 6% in the fourth quarter of 2023, but according to the current trend, it is likely to rise sharply again. After all, the Reserve Bank of India's forecast of 6.5% growth in the third quarter is already conservative.
In the first three quarters, Germany's GDP was $3.3 trillion, Japan's GDP was $3.12 trillion, and India had a gap of $500 billion to $700 billion. At the rate of growth, India could indeed quickly surpass these two countries and become the world's third-largest economy.
In contrast, the economic data of the United States in the first three quarters was also very good, with a year-on-year increase of 2.5% and a GDP of 20.3 trillion US dollars. Consumption and investment in the United States are also active, which is an important reason for economic growth. Under the influence of interest rate hikes, a large amount of capital returns, coupled with the return of manufacturing, the US economy is likely to continue to maintain good growth.
The mainland is also recovering strongly, with a year-on-year increase of 5.2% in the first three quarters, and the GDP fell to 130157 billion in dollar terms, mainly due to the exchange rate, the RMB has depreciated, and it is expected that there is no problem in completing the 5% growth target for the whole year.
Since India surpassed its former overlord Britain in 2021, it has begun to distance itself, with the UK's GDP growth rate in the first three quarters of only 0.5%, totaling $2,511.2 billion, $88.3 billion less than India. There is no doubt that the gap between the two countries will widen.