The leading economic consultancy Cebr released its annual report The World Economic League Table. The report gives an end of year report on GDP in the 30 largest economies in the world. It also forecasts which countries will be in the ‘Top Thirty’ for 5, 10 and 15 years ahead.
– China’s GDP in $ to overtake the US only in 2028 – much later than most previous predictions
– India’s GDP overtakes Japan also in 2028
– UK does second best of advanced economies and overtakes Germany to become the largest Western European economy ‘around 2030’
– Brazilian economy to remain behind the UK until 2023 – at the time of the football world cup in 2014 ‘at least Britain will beat Brazil at something….’
This year’s report is updated to take account of the likely surplus of energy and falling oil and gas prices in the 2020s, weaker commodity prices than had previously been expected and the sell-off of some emerging market currencies in mid-2013.
The key points of this year’s report are:
– Our latest forecasts now show China overtaking the US in 2028 to become the world’s largest economy. This is later than some analysts have suggested and reflects the continuing performance of the US as the West’s strongest economy and the slowing down of the Chinese economy.
– India overtakes Japan in 2028 to become the world’s third largest economy. Abenomics means that Japan is likely to follow a weak currency policy for the foreseeable future which means that its GDP in dollar terms gets overtaken by India earlier than we had previously expected.
– Brazil overtook the UK in 2011 to become briefly the world’s 6th largest economy. But it has since fallen back and does not overtake again until 2023 when it overtakes both the UK and Germany to become the world’s fifth largest economy. In 2014, while the Football World Cup is held in Brazil, it still looks likely that Britain beat Brazil at something by still having a larger economy!
– The UK is the West’s second best performing economy. Indeed it is the only major Western economy to move up the league table (temporarily) becoming the world’s 5th largest economy in 2018 by overtaking France. After that it slips back to 7th place in 2023 and 2028 as India and Brazil overtake. But by 2028 the UK economy is forecast to be only 3% smaller than the German economy and is likely to overtake Germany to become the largest Western European economy around 2030.
– Slow growth, a weakening currency and for some countries adverse demographic dynamics hit the European economies. We make the forecasting assumption that the Euro holds together for these forecasts. If the Euro broke up, the outlook for German GDP would be much better and the outlook for the other European economies correspondingly worse. On the assumption that the Euro holds, Germany drops from the 4th largest economy in 2013 to the 6th largest in 2023 and 2028. For France the drop is more precipitous – from 5th in 2013 to 8th in 2018 to 10th in 2023 to 13th in 2028. Similarly Italy drops from 8th in 2013 to 15th in 2028 and Spain from 13th in 2013 to 18th in 2028.
– 2013 shows only two changes in the top 20 economies – Russia overtakes recession stricken Italy to gain 8th place and Canada overtakes India as a result of the collapse of the rupee to retake its position as the second largest economy in the Commonwealth and the 10th largest economy in the world. Below the top 20 some of the changes are more dramatic – Iran drops from 21st position to 30th as sanctions bite; South Africa drops from 28th out of the top thirty (to 33rd) as strikes, slow growth and a weakening currency affect its position.
– By 2018 the emerging economies are on the move. Russia is up to a high point of 6th; India 9th, Mexico 12th, Korea 13th and Turkey 17th. Thailand (provided that political stability returns) gets into the top 30 at 27th.
– By 2023 India and Brazil are on the march. India is up to 4th, Brazil to 5th. Taiwan breaks into the top 20 at 19th.
– By 2028 the league table is being reordered. China has moved to No 1; India to No 3. Mexico is in the top ten at No 9. Korea and Turkey are 11th and 12th and have overtaken France. As symbols of the new world order, Nigeria, Egypt, Iraq and the Philippines break into the top 30. All the latter group depend on maintaining or in some cases regaining political stability.
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