According to The Express Tribune, International Monetary Fund (IMF) projections released on Thursday show India becoming the world's fourth-largest economy by nominal GDP in 2027, overtaking Japan.
The IMF expects Japan to hold fourth place this year, but India is set to take its spot in 2027 with GDP reaching $4.52 trillion. Japan would slip to sixth that year, behind both India and the United Kingdom. The United States remains the largest economy, followed by China and Germany.
The IMF raised its 2026 growth forecast for India to 7% this week. Presenting the fund's Asia-Pacific regional economic outlook, Asia Director Krishna Srinivasan said India entered the energy price shock caused by the US-Israel war on Iran with strong fundamentals, solid growth, fiscal prudence and ample reserves.
Japan's growth, by contrast, is projected to slow to 0.7% in 2026. The report pointed to higher energy prices, inflation, a yen that hit a 40-year low against the dollar over the summer and an ageing population, while the Bank of Japan has raised rates to their highest in three decades. Tokyo's Nikkei fell nearly 5% on Thursday amid a tech sell-off. More on The Express Tribune.