India to become world’s largest economy by 2050: Wealth Report 2012

India is expected to grow rapidly in the next 40 years and be the world’s largest economy by 2050, as per the Wealth Report by Knight Frank & Citi Private Bank. China will overtake the US to become the world's largest economy by 2020, which in turn will be overtaken by India in 2050.  The focal point of global economic activity based on GDP, will shift eastwards to lie somewhere between China and India. India with its GDP of $3.92 trillion currently ranks 4th in the world. It is expected to grow at an average rate of 8% from 2010-2050 and shall grab the top spot by 2050 with a GDP of $85.97 trillion. However, in terms of per capita income, India does not figure in the top 10 nations of the world.

Citi forecasts that the North American and Western European share of world real GDP will fall from 41% in 2010 to just 18% in 2050. Developing Asia’s share is expected to rise from 27% to 49% in 2050. It also confirms the relentless shift in wealth distribution towards Asia-Pacific:  the region covering China, SE Asia and Japan now has more centa-millionaires (those with over $100 million in assets) than North America or Western Europe. The greatest threat to India’s wealth shall be its inflation levels.

As per the report, the cities to watch in 2050 are the 400 emerging market 'middleweights' - fast growing cities with populations between 200,000 and 10 million. This dynamic group includes cities of Surat and Nagpur in India. Mumbai and New Delhi will also be amongst the top 20 fastest growing cities globally.

Reporting about India’s property market, the report states that the Indian government has not had to resort to specific cooling measures to check the growth of its burgeoning prime residential markets. Weak economic conditions and high inflation, with a concomitant decision by the Reserve Bank to raise interest rates 13 separate times in 2011, contributed to prices in Mumbai falling by more than 18% last year. India’s prime market is unusually vulnerable to internal economic events because of the country’s strict limits on foreign buyers. This removes the potential safety net provided by inward capital flows from overseas buyers.

There were some other interesting facts brought out in the report. Indians believe that good public transport, safety and strong governance make a global city. Surprisingly, ‘the view ‘is the most important element while selecting a second house, for the Indians. Indians term offices, preferably pre-let to multinational corporations as top commercial investments and their favourite things are gadgets and cars.

Knight Frank India is a company that provides a comprehensive range of real estate related services covering residential, commercial, land, investments, hospitality & leisure, valuation, advisory services, facilities management and project management. Citi, is a leading global financial services company, and has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions, including India.