Earlier in December, the news emerged that India had finally surpassed the UK as the sixth largest economy in the world. To financial experts and pessimists alike, it seemed 2016 had acquired yet another notch on its post-Brexit misery belt. But aside from the obvious wound to our pride, what are the genuine impacts of such a vital economic shift?
By February 2016, India had overtaken China as the world’s fastest growing economy. This prompted Telegraph reporter Mehreen Khan to state that such an accomplishment “[cements India’s] position as one of the sole bright spots in a flailing global economy.” There is rather a symbolic truth to these words, especially as China has become synonymous with dynamic economic progression over the last few decades. Economist Richard Brubaker’s comment, as cited by Forbes magazine, that China “has doubled the size of its economy in the past fifteen years,” propels India’s financial success into an even more remarkable light.
Some may argue that such a stride is only a natural progression. India has a population of roughly 1.3 billion with a significant mobilised workforce. It has an ever-growing base of multi-lingual workers, enabling its status as a leading global exporter of outsourcing services and technology-based companies. Yet even the most cynical can agree that reaching this target 4 years earlier than anticipated is fiercely impressive. Such a fact affirms yet again, the confident projections of leading economists regarding India’s future.
The statistics are staggering. Whilst the UK’s GDP is now at 1.87 trillion GBD, India’s is at a comparatively higher 2.3 trillion, exhibiting an impressive average annual growth rate of around 7% over the past 20 years. Historically, this is no mean feat for the nation whose economy and resources less than 70 years ago were still ravaged and drained for British imperial gain.
With India’s economy estimated to overtake the size of Japan and Germany collectively by 2019, the nation is clearly riding high from such prodigious success. The converse is perhaps less glamorous, as we examine what this means for us. Regardless of one’s political affiliations, it cannot be denied that Brexit left its mark on the British economy. The Office for Budget Responsibility, which had predicted growth forecast at 2.1% in 2016, has projected a much lower 1.4% for 2017 in its recently released Autumn Statement. Brexit decidedly caused an immediate economic dip. This somewhat stabilised, albeit at a stagnated rate.
As affirmed by the BBC, the three months post-Brexit saw the economy grow by 0.5%, though at a lower rate than the 0.7% in the prior quarter. Thus, with such conflicting figures and an economic structure still attempting to readjust itself after a major political aftershock, very little seems clear for our economic future. But what is clear, at least for now, is that India has perhaps gained where the United Kingdom has lost.
Photograph by Heather Cowper via Flickr