India to overtake Japan as No. 4 economy in 2027: IMF

The International Monetary Fund expects India to become the world's fourth-largest economy in 2027, overtaking Japan with nominal gross domestic product projected at $4.52 trillion.

The IMF said Japan would remain the fourth-largest economy this year but would fall to sixth place in 2027, behind both India and the United Kingdom. The United States is projected to remain the world's largest economy, followed by China and Germany.

The fund raised its forecast for India's 2026 growth to 7.0%. IMF Asia-Pacific director Krishna Srinivasan said India entered the current energy price shock from a strong position, with strong growth, fiscal prudence and large reserves.

Japan's growth is projected to slow to 0.7% in 2026. The IMF pointed to higher energy prices, wider inflation and structural pressures including Japan's ageing population. The yen's fall to its lowest level in 40 years against the dollar over the summer has also raised import costs.

Srinivasan said Japan's economy was benefiting from the boom in artificial intelligence investment, but less than some regional neighbours. Tokyo's Nikkei index fell nearly 5% on Thursday, dragged down by technology stocks amid doubts over the profitability of the AI sector.