How to calculate the rate of growth of the Indian economy by measuring economic activity, according to the IMF
Anupam Jha explains how to calculate India’s economic growth rate.
According to the United Nations, India’s gross domestic product grew at an annual rate of 2.5% in the past decade.
This is lower than the OECD average of 2% and more than double the rate for OECD countries like France, the United Kingdom, Canada and Australia.
However, the economy is not growing at the same rate as other countries.
India’s economy is also far behind the global average, with GDP per capita (GDP) of USD$31,600.
The United States is a close second with a GDP per person of USD26,000.
India is also ahead of China in terms of GDP per head.
The IMF has been forecasting a 2% GDP growth rate in the next five years.
However in the last five years, India has recorded a GDP growth of only 1.5%.
India’s economic performance has been among the best in the world in recent years.
The country is ranked No. 2 on the World Bank’s ‘World’s 50 Most Developed Countries’ list.
The Reserve Bank of India (RBI) has been keeping an eye on India’s growth and inflation and has kept interest rates at low levels.
In recent months, the RBI has kept its benchmark interest rate at 5% as the government aims to get back its growth rate to 3%.