An Asian country is poised to overtake Germany as the world’s largest economy. Here’s what its gross per capita GDP is and how much it is.
Germany could lose its preeminent role as the third largest economy in the world, and it could be replaced by an Asian country.
This is what emerges from a careful analysis of global economic trends and forecasts for the coming years. Although Germany has managed to maintain its status, despite the recession, the gap with the world’s largest economies, the United States and China, is widening.
This change reflects a broader economic rebalancing at a global level, with new emerging powers gaining space on the international stage. Think of Poland wanting to become a military superpower, or the fact that Luxembourg has lost its primacy as the richest country in Europe, conquered by Ireland.
Unlike Luxembourg, which is overtaken by a European country, Germany could be knocked out not by the fourth country on the podium (Japan) but by India, which would enter the ranking directly in third place, without any hard climb. Let’s find out what is happening to the German economy and what is the secret of India’s success.
Germany, a declining power: what are the causes
For decades, Germany has been synonymous with economic stability, innovation and industrial power. However, in recent years the country has experienced a significant slowdown, caused by several factors. First of all, Germany is facing its third consecutive recession, revealing a structural economic weakness.
In fact, Germany’s gross domestic product (GDP) amounted to approximately $4.66 trillion in 2023, but growth has been limited, putting its position in the global ranking at risk.
One of Germany’s biggest problems is the crisis in the manufacturing sector, which has historically been a pillar of the country’s economy. Rising energy costs and disruptions in global supply chains have put pressure on German industry, making it harder to compete with more dynamic emerging economies. In addition, a tight labor market and a shortage of skilled workers are limiting the country’s recovery.
Another critical factor is the demographic decline. With a population of 84-85 million and a low birth rate, Germany struggles to maintain a young and competitive workforce. This problem is further exacerbated by the country’s reduced attractiveness to highly skilled workers from abroad.
Economic policy has also contributed to the slowdown. Fiscal austerity, while it has allowed Germany to maintain a robust economy for years, has reduced public investment in infrastructure and innovation. Without a significant change of course, Germany risks losing its position as the world’s third largest economy. Germany could be a warning to Italy, which is facing an equally serious, if not worse, crisis.
India as the third largest economy in the world
While Germany shows signs of slowing, India continues to grow at a strong pace, edging ever closer to third place in the world economic ranking. With a GDP already exceeding $3.7 trillion and an expected annual growth rate of between 6% and 7%, India could overtake Germany by the end of the decade.
One of the main factors behind India’s success is its large population, which reached around 1.5 billion in 2024, surpassing even that of China. This means not only a huge workforce, but also a constantly expanding domestic market. Growing urbanization and rising average incomes are contributing to strong domestic demand, which is supporting economic growth.
In addition, India has benefited from strong growth in the technology and services sectors, with global companies increasingly investing in the country to tap into its enormous potential. However, India will have to face several challenges to consolidate its economic rise. poverty and social inequality remain significant issues, as does the still poor infrastructure in many regions. Furthermore, the need for fiscal and administrative reforms to improve the business environment will be crucial to attract foreign investment and ensure sustainable growth. In short, the game is not over yet.
Original article published on Money.it Italy 2025-02-20 22:21:00. Original title: Questo Paese si prepara a sostituire la Germania come terza economia mondiale
