It rose by 7.8%, and its GDP growth rate surpassed that of China and the United States, ranking first among the top ten economies

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2024-06-03 11:45Published in Guangdong

As the world's two largest economies, China and the United States are still growing well. In the first quarter of 2024, China's GDP grew by 5.3%, which is still the highest growth rate among the world's major economies.

The U.S. doesn't seem to be bad, revising its first-quarter economic data, and although the annualized growth rate was revised down from 1.6% to 1.3% on an annualized basis, the year-on-year growth rate was only 0.1 percentage points lower, still up 2.8%.

Because of the exchange rate and inflation, the proportion of China's GDP and the United States' GDP in the first quarter fell to about 60%. Inflation in the United States is still not low, above 3%, and it will take effort to reduce the 2% target.

Of course, it is also because of high inflation and the appreciation of the US dollar, the IMF predicts that the US GDP growth this year will once again rank first in the world.

Germany and Japan, the third and fourth largest economies that laugh at each other, can be said to be a pair of "difficult brothers", and both experienced negative growth in the first quarter of this year. Germany's GDP fell by 0.9% and Japan's by 0.2%.

Over the past few decades, the economic development of Germany and Japan has been slow or even stagnant. Now, their third and fourth positions may not be guaranteed, because there is a dark horse that is rising rapidly, and it is India.

On May 31, India released economic data for the first quarter of 2024, with GDP surging 7.8%, surpassing China and the United States, and ranking first among the world's top 10 economies.

Since 2021, after the outbreak of the pandemic, India's economy has maintained a strong growth momentum. In the past four quarters of 2023, the growth rate will be 6.1%, 7.8%, 7.6%, and 8.4% respectively, which can be said to be the highest in the world.

India's GDP growth in the first quarter far exceeded market expectations of 6.9%, which is a very bright performance. The manufacturing industry is still the biggest driving force for economic development, up 8.9% year-on-year. It is understood that India's purchasing managers' index (PMI) has remained above the 50 line for the 34th consecutive month, indicating that the economy is full of vitality.

The United States and the European Union have led the "de-Chinaization" of supply chains, which has allowed India to reap development dividends. Although India's production efficiency is far inferior to China's, the United States still "values" India so much.

As of December 2023, India already accounts for 14% of the world's total iPhone production, and Apple plans to increase production capacity to 25% in the next few years. In FY2023~2024, India's smartphone exports increased by 42% year-on-year, with the United States contributing hugely.

In addition to smartphones, India is also accelerating the development of the automotive industry, and the number of automobile-related investments in India led Asia in the first quarter, such as the domestic SAIC MG investment in India, and will increase investment in the next few years.

India's foreign investment has ranked second among developing countries for many years, and a large number of multinational companies have poured into India, such as mobile phones, computers, electronics, automobiles, batteries and other industries.

On the one hand, to accelerate the creation of "Make in India", on the other hand, to speed up infrastructure construction and improve logistics efficiency, India is replicating China's development path. From 2014 to 2023, India spent about Rs 43.5 trillion on infrastructure and will invest $534 billion in infrastructure over the next two years.

The rapid development of the economy has also caused India's stock market to rise sharply. As recently as May 21, the intraday trading market capitalization of India's Bombay Stock Exchange exceeded the $5 trillion mark for the first time. Compared to March 2023, the market value of the Indian stock market has risen by 60%, which directly puts the number of companies with a market capitalization of more than $10 billion in India to more than 100.

With such good economic performance, Modi has little suspense in this year's Indian general election, and is expected to start a third term and continue to implement his "Modi economics".

Finally, looking at GDP, India's GDP in the first quarter was 78,281.48 billion rupees, which is 942.8 billion when converted into US dollars. Germany, which ranks third, has a GDP of $1,139.3 billion, and Japan has a GDP of $1,008.3 billion.

India is now full of confidence, saying that India will surpass Japan and Germany in the early fiscal year of 2026~2027 to become the world's third largest economy, that is, probably the year after.

Of course, India's potential and ambition does not seem to be just third in the world. According to the projections of Goldman Sachs in the United States, by 2075, India will become the world's second largest economy, with a GDP of $52.5 trillion. China is the world's largest economy with a GDP of $57 trillion, while the United States has become the third largest economy with a GDP of $51.5 trillion.

India's economic growth is expected to continue to maintain high growth this year, and it remains to be seen.

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