IMF: India to overtake Japan as the world's 4th largest economy in 2027 at $4.52 trillion

India is expected to overtake Japan and become the world's fourth largest economy in 2027, with nominal GDP of $4.52 trillion, according to the International Monetary Fund's Regional Economic Outlook for Asia and the Pacific, released on Thursday 15 October and reported by AFP and Dawn.

That is about Rs 1,252 trillion at today's interbank rate of Rs 276.92 to the dollar, for scale.

The new world ranking

By nominal GDP, the IMF's figures point to this order in 2027:

1. United States
2. China
3. Germany
4. India (up from fifth)
5. United Kingdom
6. Japan (down from fourth)

Japan keeps fourth place in 2026 but falls two places the following year, behind both India and the UK, according to the report.

Why the gap is closing

The difference is growth. The IMF raised its forecast for India's 2026 growth to 7.0% this week, while it expects Japan to grow only 0.7% this year.

Currency matters too, because the rankings compare economies in dollars. Over the summer the yen fell to its lowest level against the dollar in 40 years, which shrinks Japan's economy when it is counted in dollars. The Bank of Japan has since raised interest rates to their highest level in three decades. On Thursday, Japan's Nikkei index fell nearly 5% in the global technology selloff.

Nominal GDP rankings say nothing about how well off people are on average: Japan has less than a tenth of India's population, so its income per person remains many times higher.

Why it matters in Pakistan

India's rise reshapes the region Pakistan trades and competes in, while Japan remains the source of the technology behind the Toyota, Honda and Suzuki cars assembled here, so a weaker yen feeds into what parts and imported cars cost. Follow the rupee against the dollar on our dollar rate page, and see what an imported car pays in duties with the car registration tax calculator.