India became the world’s fifth largest economy last year, according to data from the IMF’s October World Economic Outlook. When ranked by nominal GDP, the country leapfrogged France and the UK.
The country’s GDP growth has been among the highest in the world in the past decade – regularly achieving annual growth of between 6-7%.
This rapid rise has been fueled by a number of factors, according to a 2016 McKinsey Global Institute report, including urbanization and technologies that have improved efficiency and productivity.
India’s real GDP, however, a measure that accounts for inflation, is forecast to slow in the year ahead thanks to credit weaknesses.
On the rise
As recently as 2010, India was in 9th place, trailing countries such as Brazil and Italy.
India’s rise is even more dramatic across the past 25 years. Since 1995, the country’s nominal GDP has jumped more than 700%.
Challenges ahead
Despite its strong economic growth, the country still faces its share of challenges. Access to development and new opportunities has been uneven, says the World Bank, varying by geographic location.
Furthermore, India remains home to one quarter of the world’s poor. Just 39% of its rural residents can access sanitation facilities and nearly half the total population still defecate in the open, according to the UN.
Still, significant progress has been made. Poverty reduction rates are among the highest in the world, with more than 160 million fewer people living in extreme poverty in 2000 compared to 2015.
According to the World Bank, the country is also seeking ways to ensure its future growth is more sustainable and inclusive, adjusting its policies regarding social protections and infrastructure development.
Joe Myers is a writer for formative content.
This article was originally published in the World Economic Forum.
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