Why in News?
India has surpassed Japan to become the world’s 4th largest economy in nominal GDP (Gross Domestic Product) terms, driven by strong domestic demand and sustained high growth momentum.
Description:
Key Terms:
- Nominal GDP: Gross Domestic Product (GDP) measured at current market prices (not adjusted for inflation).
- Real GDP Growth: GDP growth adjusted for inflation.
- Purchasing Power Parity (PPP): GDP adjusted for cost-of-living differences across countries.
Key Facts:
- India’s Nominal GDP (2025): ~USD 4.18 trillion
- India’s Global Rank (Nominal GDP): 4th
- India has overtaken: Japan
- Top Economies (Nominal GDP): United States, China, Germany, India
Growth Performance (India):
- Real GDP Growth (Q2, 2025–26): 8.2%
- Real GDP Growth (Q1, 2025–26): 7.8%
- India among the fastest-growing major economies globally
Drivers of Growth:
- Robust private consumption (key driver)
- Urban demand recovery
- Improved export performance
- Benign inflation conditions
- Strong credit flow to commercial sector
- Structural reforms & public capital expenditure
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