World Economy Forecast: S&P Global Predicts India as Top Expanding Major Economy Amidst Global Instability
India, the world's fastest-growing major economy, has been enhancing its growth advantage over developed countries through strategic economic reforms, infrastructure development, and process improvements. According to S&P Global's report, India's economic outlook is shaped by both domestic buffers and external challenges.
The private credit industry in India is poised for strong growth, driven by a significant financing gap left by traditional lenders and strengthened by domestic insolvency frameworks. This growth is expected to play a vital role in shaping the nation's economic trajectory.
S&P Global also has a positive outlook on India's economic growth, with the nation's GDP forecast to grow 6.5% this fiscal (FY26). This growth performance, compared to advanced economies, has not been derailed by past external shocks.
India's digital landscape is undergoing an unprecedented transformation, driving significant investments in digital infrastructure, such as data centers. As a result, India is expected to become the second-largest market for data centers' electricity demand in the Asia-Pacific region over the next two years, surpassing Japan and Australia.
In the maritime sector, India has the potential to increase its share of the global shipbuilding market over the next decade. However, becoming a top-five shipbuilding nation by 2047, currently less than 1% of the global market share, is a challenging journey for India, as noted in the report.
Moreover, India aims to localize the nuclear value chain and use its vast thorium reserves to enhance domestic capacity building and technology transfer, paving the path for growth. This strategy has become increasingly integrated in the Indian economy.
The nation is expected to encourage more participation in global trade, which offers gains in economic growth, capital attraction, and employment opportunities. Increased participation in global trade is seen as a key driver for India's future economic growth.
However, the economy needs reforming, especially in terms of center, state, and bureaucratic alignment. This is crucial for India to tap into its full potential and maintain its momentum of growth.
In conclusion, India's economic outlook remains positive amidst international market volatility. The nation's potential to increase its share in various global markets, such as shipbuilding and data centers, coupled with its strategic economic reforms and infrastructure development, positions India for a strong and sustainable growth trajectory in the coming years.
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