India Set to Surpass Japan as World’s 4th-Largest Economy in 2025: IMF

According to the latest World Economic Outlook released by the International Monetary Fund (IMF), India is poised to become the world’s 4th-largest economy in 2025, overtaking Japan. The report projects India’s nominal GDP will climb to $4.19 trillion next year, narrowly surpassing Japan’s estimated $4.18 trillion.

The IMF highlights India as the fastest-growing major economy, with growth expected to remain above 6% over the next two years. In stark contrast, Japan’s economy is projected to expand by a modest 0.6% in both 2025 and 2026, weighed down by weakening global trade and its heavy reliance on exports.

Japan and Germany Face Economic Headwinds

India’s robust growth trajectory is expected to push it further up the global economic ladder. By 2028, the country’s GDP is forecast to hit $5.58 trillion, overtaking Germany and securing the position of the world’s third-largest economy.

Currently ranked fourth, Germany is projected to face significant headwinds, including persistent trade tensions. The IMF anticipates zero growth for Germany in 2025, followed by a slight rebound of 0.9% in 2026. By 2028, Germany’s GDP is expected to reach $5.25 trillion.

US and China Remains World’s Leading Economy

Meanwhile, the United States will continue to lead as the world’s largest economy, with a projected GDP of $30.51 trillion in 2025. China will remain in second place, with an expected GDP of $19.23 trillion. However, the IMF notes early signs of a slowdown in the U.S. economy, exacerbated by a wave of global tariffs. Growth in the U.S. is forecast to decline to 1.8% in 2025 and 1.7% in 2026.

The Euro Area is also bracing for sluggish performance, with GDP growth expected to reach just 0.8% in 2025, improving slightly to 1.2% in 2026. Among individual European economies, France is projected to grow at 0.6% in 2025 and 1.0% in 2026. Spain, however, stands out with a forecasted growth of 2.5% in 2025, although this is expected to taper to 1.8% the following year. The United Kingdom’s economy is predicted to grow at 1.1% in 2025 and 1.4% in 2026.

Conclusion

The IMF’s projections underscore a significant shift in the global economic landscape, with emerging markets like India rapidly ascending the ranks while traditional powerhouses such as Japan and Germany face mounting challenges.

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