19:19 GMT +315 November 2019
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    The Union and Indian flags hang near the London landmark Big Ben in Parliament Square in London, Thursday, Nov. 12, 2015.

    Indian Economy to Push UK Out of Top 5 List, to Leapfrog Germany by 2022

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    The Indian economy is expected to surpass Germany by 2022 and push the United Kingdom out of the top five world economies after 2017 because of continuing economic reforms.

    New Delhi (Sputnik) Based on the analysis of growth projections by the International Monetary Fund (IMF), the Indian economy will be world’s fourth largest economy in the next five years and move its former colonial master the United Kingdom further down the order of the world’s largest economies from this year itself.

    Currently, the top five largest economies are the US, China, Japan, Germany and United Kingdom. India ranks sixth with $2,454.458 billion nominal GDP.

    The IMF observed that implementation of critical structural reforms, favorable terms of trade, and lower external vulnerabilities help India to achieve a higher rate of growth. IMF predicts 7.2% GDP growth rate for 2017-18 and tax reform like Goods and Services Tax would raise the country’s growth rate above 8% in the medium term.

    “Higher world growth of 3.4% in 2017-18 & 3.6% in 2018-19 as per IMF prediction would help us in growing much faster,” India’s Finance Minister Arun Jaitley said.

    Deteriorating repayment capacity of Indian industries, however, is a major worry for the Narendra Modi government as the non-performing assets of the commercial banks have gone beyond 16% of the total amount loaned.

    Due to high bad debt ratio, lending growth is crippling in recent years which somehow is impacting manufacturing capacity and employment generation capability of the economy. “A significant share of debt in Argentina, Brazil, China, India, Nigeria, and Turkey is owed by firms with relatively constrained repayment capacity in terms of interest-coverage ratios, and in Turkey, a significant share of this debt is in foreign currencies,” the IMF said.

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