Economic Survey: Indian economy grows to USD 2.75 trn despite slowing global economy

New Delhi: The size of Indian economy has grown to USD 2.75 trillion in 2018-19 from USD 1.99 trillion in 2015-16 even as global economy has faltered, according to the Economic Survey 2018-19.

When the world economy and emerging markets and developing economies (EMDEs) are projected to slow 0.3 and 0.1 percentage points in 2019 respectively, growth of Indian economy is forecast to increase, said the Survey, tabled by Finance Minister Nirmala Sitharaman in the Rajya Sabha on Thursday.

"Crucially, India forms part of 30 per cent of the global economy, whose growth is not projected to decline in 2019," it said.

According to data from the World Bank, India surpassed France and emerged as the world's sixth-largest economy in 2017, and is likely to overtake the UK in the world's largest economic rankings in 2019.

The five economies ahead of India are the United States, China, Japan, Germany and the United Kingdom. According to the pre-Budget document, the contribution of the Indian economy to the gross domestic product (GDP) of EMDEs and the world economy has increased consistently over the years.

"In a span of less than a decade, India's contribution to EMDEs GDP has increased by around 1.3 percentage points and to the world economy by around 0.7 percentage points," the Survey said. India's share in GDP of EMDEs stood at 8 per cent in 2018.

Noting that among EMDEs, India and China are the major drivers of growth, the Survey said, "The global economy -- in particular the global growth powerhouse, China -- is rebalancing, leading to an increasing role for India."

Hence, India's contribution has become much more valuable to the global economy, it added. According to the Survey, India continued to remain the fastest-growing major economy in the world in 2018-19, despite a slight moderation in its GDP growth from 7.2 per cent in 2017-18 to 6.8 per cent in 2018-19.

On the other hand, the world output growth declined from 3.8 per cent in 2017 to 3.6 per cent in 2018, it said. The slowdown in the world economy and EMDEs in 2018 followed the escalation of US-China trade tensions, tighter credit policies in China, and financial tightening alongside the normalisation of monetary policy in the larger advanced economies, the Survey noted.

It pointed out that the average growth rate of India was not only higher than China's between 2014-15 and 2017-18, but was much higher than that of other top major economies as well.