India 2nd most resilient economy among the top ten leading economies in 2021: PHD Chamber

No. PR- 210

January 31, 2021

New Delhi

India 2nd most resilient economy among the top ten leading economies in 2021: PHD Chamber

Germany ranks 1st in the PHDCCI International Economic Resilience (IER) Rank followed by India and South Korea at 2nd and 3rd positions respectively

The COVID-19 crisis has tested the macroeconomic strength of the economies worldwide. As the Indian economy has gradually come out of the lockdown restrictions, it is not only exhibiting encouraging signs of strong economic resurgence but also ranks 2nd most resilient  on the basis of 5 lead macroeconomic indicators among the top 10 leading economies, says an analysis conducted by industry body PHD Chamber of Commerce and Industry.

The analysis of the leading economies conducted on the basis of the five leading macroeconomic parameters shows that India’s International Economic Resilience (IER) Rank stands at 2nd among the top 10 leading economies, indicating strong resilience of the Indian Economy to the daunting pandemic of Covid-19, said Mr. Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry in a press statement issued here today.

India's Real GDP growth rate is projected to be the highest at 11.5% in the year 2021 among the top 10 leading economies in the world. The Merchandise Export volume growth is estimated to be the strongest at 14.0% in the year 2021, reflecting the great potential that the economy holds in terms of its international presence, said Mr. Aggarwal.

The report released by PHDCCI, titled ‘New Year Economics - Growth Story Continues…’, reveals that among the five lead macroeconomic indicators reflecting a country’s economic performance viz., Real GDP growth Rate, Merchandise Export Growth rate, Current Account Balance (% of GDP), General government net lending/borrowing (% of GDP) and Gross Debt to GDP ratio, depicts the bright prospects of Indian economy with a strong resilience to the global economic turmoil, caused by COVID-19. The overall performance is projected at the 2nd position after Germany in the year 2021, said Mr. Sanjay Aggarwal.

         IER (International Economic Resilience) Rank of the Top 10 Countries in the year 2021

 Top 10 Leading Economies International Economic Resilience (IER) Rank Real GDP growth Rate Merchandise Export Growth Current Account Balance % of GDP General Govt. net lending / borrowing (% of GDP) Gross Debt to GDP ratio Aggregate of ranks of each leading indicator
Germany 1 7 5 1 2 3 18
India 2 1 1 6 8 4 20
South Korea 3 8 10 2 1 1 22
China 4 2 8 5 9 2 26
Canada 5 6 2 9 6 6 29
France 5 3 7 7 5 7 29
Japan 5 8 4 3 4 10 29
U S A 5 4 3 8 6 8 29
Italy 6 9 6 4 3 9 31
U K 7 5 9 10 7 5 36

Source: PHD Research Bureau, Compiled from IMF World Economic Outlook Update, January 2021 and IMF estimates of WEO 2020 

Note – The value of IER Rank in column (2) is calculated on the basis of the analysis of column (8) which gives the aggregate of ranks of each of the five leading indicators. Lower the score of column (8), better is the IER Rank in column (2).

IER Rank for South Korea and China is estimated at 3 and 4 respectively for the year 2021. Canada, France, Japan and the USA have shared the same IER Rank of 5. This is followed by Italy and the UK with their IER Ranks at 6 and 7 respectively. In order to determine the International Economic Resilience (IER) Rank, all the five considered leading parameters have been ranked on the basis of their performance among the top ten leading economies, said Mr. Sanjay Aggarwal.

Among the five economic indicators, India’s rank is No. 1 in terms of Real GDP growth rate at 11.5% followed by China and France with their real GDP growth at 8.2% and 6.0% respectively. With India projected to be at first position in its merchandise export volume growth at 14.0%, this is followed by Canada and U.S.A. at 9.9% and 9.7% respectively, he said.

The Current Account Balance (% of GDP) is estimated to be the highest for Germany at 6.8% followed by South Korea at 3.4%. South Korea is projected to have No. 1 rank for the parameters of General government net lending/borrowing (% of GDP) and Gross Debt to GDP ratio. Indian gross debt to GDP ratio is projected to be the fourth lowest among the world leading economies in the year 2021, added Mr. Aggarwal.

Amidst the dynamic reforms by the Government supported by prompt liquidity monetary measures by the RBI, Indian economy has been moving forward to contain the spread of the virus, providing relief for vulnerable sections, and overcoming vaccine-related challenges, said Mr. Sanjay Aggarwal.

With pandemic relatively under control and economic activities steadily thriving, the economic recovery is apparent through the positive performance of the high frequency economic and business indicators of the recent months, said Mr. Sanjay Aggarwal

The growth promising Sectors for the Indian economy in the new year 2021 include Agri & food processing, Real estate, Infrastructure, Automobiles, Information Technology, E-Commerce, Health, FMCG, Telecom, Over The Top (OTT) Market and Financial Technology (Fintech) industry. Greater facilitation of the agricultural and allied sector would help prevent adverse supply-side ripple effects of the pandemic, while further strengthening ‘vocal for local’, said Mr. Sanjay Aggarwal

Measures undertaken now to fortify the digital economy, accelerated growth in industry 4.0 would go a long way to mitigate the daunting impact of the COVID-19 pandemic and hence refuel the growth vehicle for a journey to the US $ 5 trillion economy, said Mr.. Sanjay Aggarwal

The year 2020 has demonstrated to be a time of key paradigm shift both for the Indian start-up and investor ecosystems. At this juncture, the year 2021 holds great promise of growth in the sectors like health-tech and ed-tech among others, whose trajectories have been supported by the series of structural reforms by the government, said Mr. Aggarwal

Further strengthening of ease of doing business in India, greater revitalisation of credit cycle and ensuring flexible employee working arrangements would help expedite the path of management of COVID-19 pandemic and rekindle robust, sustainable and equitable growth trajectory, said Mr. Sanjay Aggarwal.

Going forward in the New Year 2021, an even greater conjunction of substantially targeted fiscal and monetary measures is required to further support the affected households and businesses, while bolstering up the path of strong V shaped recovery, said Mr. Sanjay Aggarwal.

Real GDP Growth Rates of the Leading Economies in 2019, 2020 and 2021


Source: PHD Research Bureau, Compiled from IMF World Economic Outlook Update, January 2021 and IMF estimates of WEO October 2020


Full report attached


Media Division

PHD Chamber of Commerce and Industry