IMF Projections Indicate India Will Surpass Japan as Fourth-Largest Global Economy by 2027

India is projected to overtake Japan and become the world's fourth-largest economy by the year 2027, according to new International Monetary Fund projections. The updated economic forecasts from the IMF highlight contrasting economic trajectories for the two Asian nations, driven by strong growth in India and structural challenges in Japan.

According to the IMF, Japan will maintain its position as the fourth-largest country by nominal gross domestic product for the current year, but India is expected to take its place in 2027 with a nominal GDP reaching $4.52 trillion. By that same year, Japan is slated to slip to sixth place globally, falling behind both India and the United Kingdom. Meanwhile, the IMF raised India's 2026 growth forecast to 7.0 percent, noting that the country has maintained strong growth in recent years despite global economic headwinds.

Releasing the IMF regional economic outlook for Asia-Pacific on Thursday, Asia Director Krishna Srinivasan stated that India entered the current energy price shock caused by the US-Israel war on Iran from a strong position characterized by strong fundamentals, fiscal prudence, and substantial reserves. In contrast, Japan faces economic growth projected to slow to 0.7 percent in 2026, impacted by an aging population, an increase in energy prices, wider inflation, and a falling yen. Japan's benchmark Nikkei index in Tokyo fell by nearly five percent on Thursday due to a plunge in tech stocks.

The United States remains the world's largest economy, followed by China and Germany in second and third places respectively.