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India to outsmart Japan in 2006

India, measured in purchasing power parity, is going to be the world's third largest economy, predicts a US firm.

india Updated: Jan 25, 2006 14:33 IST
Press Trust of India
Press Trust of India

India will surpass Japan as the world's third largest economy in 2006 as measured in Purchasing Power Parity (PPP), according to a forecast by a US professional services firm.

India's economy, measured in PPP terms, will eclipse the $4 trillion mark in 2006, making it equal to or greater than Japan's.

Only the United States and China will possess larger economies, according to Keystone India's chief economist William T Wilson.

"The results of liberalising strategic sectors such as telecom, banking, aviation and real estate are now beginning to show.

"After growing at 8.5 per cent and 6.9 per cent in 2003 and 2004 respectively, India's economy is expected to grow 7.8 per cent in 2005-2006 then decelerate modestly to 7 per cent in 2006-2007.

"Depending upon the direction of energy prices, inflation is expected to run in the 5-5.5 per cent range for 2006," said Wilson.

Faster growth is expected to boost salaries by an inflation-adjusted 7 per cent this year, fueling robust consumer spending.

The mobile telecom market in India, the fastest growing in the world, is growing at over two million subscribers per month, the chief economist at the Chicago-based firm said.

First Published: Jan 25, 2006 12:14 IST