Goldman Sachs forecasts India will overtake the United States and become the world’s second-largest economy by 2075, thanks to its progress in innovation and technology, as well as its high capital investment and growing population.
Currently, India’s economy ranks fifth in the world, behind Germany, Japan, China, and the United States.
The investment bank stated in a research that the forecast is driven by the country’s innovation and technological advancements, higher capital investment, and increasing worker productivity, in addition to the country’s growing population.
“Over the next two decades, the dependency ratio of India will be one of the lowest among regional economies,” said Goldman Sachs Research’s India economist, Santanu Sengupta.
Sengupta noted that increasing India’s labor force participation was crucial to maximizing the country’s rapidly expanding population. He also predicts that in the next two decades, India would have one of the lowest dependency ratios of any major economy.
However, Goldman warned of a potential risk from the labor force participation rate, depending on whether it grows at the rate predicted.
According to the report, “the labor force participation rate in India has declined over the last 15 years,” with women’s involvement rate being “significantly lower” than men’s.
