Japan Could Fall to Sixth Place in 2027 as India and Britain Overtake It, IMF Forecasts

Japan is at risk of falling further in the ranking of the world's top economies. According to the International Monetary Fund's latest World Economic Outlook forecast, in 2027 the country's global position could slip two more places from its current standing to sixth place.

At that time, India and the United Kingdom could overtake Japan to take fourth and fifth place respectively among the world's largest economies. Japanese media outlet Japan Today published the IMF forecast.

According to IMF calculations, Japan's gross domestic product in financial terms could stand at 4.4676 trillion US dollars in 2027. By contrast, India's GDP at the same time will rise to 4.5211 trillion dollars and the financial value of the UK economy could be 4.4889 trillion dollars.

Before that, Japan's possible GDP in 2026 has been put at 4.3419 trillion dollars. A weak exchange rate for the Japanese yen against the US dollar and sluggish economic growth are the main reasons the country is falling in the global ranking. The estimate assumes a rate of 158 yen to the dollar.

The report says Japan's real economic growth could remain limited to just 0.7 percent in both 2026 and 2027. Against this slow pace, India's economy is advancing rapidly.

Relying on sustained domestic demand and a strong role for the services sector, India could achieve 7 percent growth in the 2026 and 2027 fiscal years, the IMF forecasts. At the same time, UK growth could be 1.3 percent in 2026 and 1.2 percent in 2027.

Earlier, last April, the IMF had said the United Kingdom would overtake Japan in 2029, but the recent assessment shows it will pass Japan ahead of schedule, in 2027 itself. In other words, within a few months the forecast has moved forward by two years.

Japan is currently the world's fourth-largest economy. The East Asian country has held this position since 2023. Before that, in 2010, Japan lost second place to China.

Then in 2023 it lost third place to Germany and fell to fourth. Now the forecast of losing position to India and the United Kingdom as well has brought Japan's long-term economic stagnation and currency depreciation crisis to the fore.

The numbers show the gap between Japan, India and the United Kingdom is not very large — in the 2027 estimate, the three countries' GDPs range between 4.46 trillion and 4.52 trillion dollars. A slight change in exchange rates or growth could therefore alter the order, but the direction of the IMF's current calculation is downward for Japan.

How far this forecast ultimately matches reality will depend on the value of the yen, Japan's real growth, and whether India and the United Kingdom maintain their pace. The picture will become clearer when the IMF publishes its next World Economic Outlook.