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India to leapfrog UK and France in 2018, Britain's Cebr predicts

Published 12/25/2017, 07:10 PM
© Reuters. FILE PHOTO: Keys hang from door of Maruti Suzuki Swift car at its stockyard on the outskirts of the western Indian city of Ahmedabad

By Andy Bruce

LONDON (Reuters) - India looks set to leapfrog Britain and France next year to become the world's fifth-largest economy in dollar terms, a report showed on Tuesday.

The Centre for Economics and Business Research (Cebr) consultancy's 2018 World Economic League Table painted an upbeat view of the global economy, boosted by cheap energy and technology prices.

India's ascent is part of a trend that will see Asian economies increasingly dominate the top 10 largest economies over the next 15 years.

"Despite temporary setbacks ... India's economy has still caught up with that of France and the UK and in 2018 will have overtaken them both to become the world's fifth largest economy in dollar terms," said Douglas McWilliams, Cebr deputy chairman.

McWilliams said India's growth had been slowed by restrictions on high-value banknotes and a new sales tax, a view shared by economists polled by Reuters.

China is likely to overtake the United States as the world's No.1 economy in 2032, Cebr said.

"Because the impact of President Trump on trade has been less severe than expected, the USA will retain its global crown a year longer than we anticipated in the last report," the report said.

While Britain looks set to lag behind France over the next couple of years, Cebr predicted that Brexit's effects on Britain's economy will be less than feared, allowing it to overtake France again in 2020.

Russia was vulnerable to low oil prices and too reliant on the energy sector, and looked likely to fall to 17th place among the world's largest economies by 2032, from 11th now.

© Reuters. FILE PHOTO: Keys hang from door of Maruti Suzuki Swift car at its stockyard on the outskirts of the western Indian city of Ahmedabad

A Reuters poll of economists in late October suggested global economic growth in 2018 looks likely to quicken slightly to 3.6 percent from 3.5 percent this year - with risks to that forecast lying on the upside.

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