Leading investment bank Goldman Sachs has revealed in its latest report that India will overtake America as the world’s second largest economy by 2075. Along with America, India will also push back Japan and Germany. According to Goldman Sachs, the country’s high youth population, creativity, technology, investment and growth in average labor productivity will keep India at the forefront. The report revealed, “In the next 2 decades, the percentage of young people will increase in India and the percentage of elderly and children will decrease.”
Shantanu Sengupta, an Indian-origin economist at Goldman Sachs, said that growth in investment, creativity and productivity of workers are driving India’s economy. He said that due to the growth in economic activities, the amount saved by the people will be converted into investments and the economy will boom. However, the report reveals that if the labor force participation rate in India does not increase as expected, it will become a hindrance to economic development. The number of people currently employed or looking for employment in a country’s population is known as the labor force participation rate.
As per the Goldman Sachs report, the factors driving this forecast are favorable demographics, the innovation and technology, the higher capital investment and rising worker productivity.