The global economy could more than double in size by 2050, far outstripping population growth, thanks to continued technology-driven productivity improvements.
- Emerging markets (E7) could grow around two times as fast as advanced economies (G7) on average.
- Consequently, six of the seven largest economies in the world are projected to be emerging economies in 2050 led by China (1st), India (2nd) and Indonesia (4th).
- The US could be down to 3rd place within the international Gross domestic product rankings although the EU’s share of world Gross domestic product might drop below ten percent by 2050.
- The U.K. could fall to 10th place, with France out from the top 10, and Italy out from the top 20 entirely, as they’re overtaken by faster-growing economies like Mexico, Turkey, and Vietnam (respectively).
- Economies need to enhance their institutions and their infrastructure appreciably if they’re to realize their long-term growth potential.
Emerging markets will drive global financial growth, and will progressively increase their share of world gross domestic product, according to an analysis of World Bank economic projection data. The global economy is projected to approximately double in size by 2042, growing at an annual average rate of around 2.6% between 2016 and 2050.
This growth is expected to be primarily driven by emerging market and developing nations, with the Emerging-Seven (E7) economies of Brazil, China, India, Indonesia, Mexico, Russia and Turkey growing at an annual average rate of almost 3.5% during the next 34 years, compared to only 1.6% for the advanced G7 nations of Canada, France, Germany, Italy, Japan, the United Kingdom and the U.S.
A continued change in international economic power away from recognized advanced economies, particularly those towards emerging economies in Asia and elsewhere, will be observed. The E7 could contain nearly 50% of planet Gross domestic product by 2050, although the G7’s share declines to only just over 20%.
In reality, China has already overtaken the US to become the world’s largest economy in purchasing power parity (PPP) terms, while India now stands in 3rd place and is projected to overtake the US by 2050 in PPP terms. By 2050, France will not be among the planet’ss ten largest economies on this basis, with the United Kingdom falling to 10th place, while Indonesia could climb to 4th place by 2050. Half of the seven largest economies in the world might be today’s emerging economies in PPP terms.
While looking at Gross domestic product measured at market exchange rates (MERs), one doesn’t see quite such a radical shift in international economic power, representing the lower average price levels in emerging economies.
However, China emerges as the most significant economy on the planet before 2030, and India is the 3rd largest in the world by 2050, so there’s still a considerable change in economic power towards Asia particularly. By 2050 economies like Indonesia, Brazil, and Mexico are likely to be bigger than the United Kingdom and France, while Egypt and Pakistan could overtake Italy and Canada.
Some emerging economies will take center stage by 2050. The economies of countries like Indonesia, Brazil, and Mexico are likely to be bigger than those of the United Kingdom and France, while Egypt and Pakistan could feasibly overtake Italy and Canada. With regards to growth, Vietnam, India, and Bangladesh may be the quickest growing economies over the period to 2050, averaging an increase of around 5% annually.
Nigeria has the potential to be the quickest growing significant African economies and may move up the Gross domestic product rankings from place to 14th from 2050. However, Nigeria will only realize this possible if it could expand its economy away from oil and strengthen its institutions and infrastructure.
Poland and Colombia exhibit great potential and are projected to be the quickest growing large economies in their respective regions, Latin America and the EU. Many emerging economies will be supported by a relatively rapidly growing populations, boosting domestic demand and also the size of the workforce.
This may, however, have complemented by investments in education and a vast improvement in macroeconomic principles to ensure there are enough jobs for a growing number of young individuals in these countries. Today’s advanced economies will continue to have higher average incomes, but by 2050, developing countries must make progress in eliminating this gap. With a possible exception of Italy, each of the G7 will continue to sit over the E7 based on rankings of gross domestic product per capita in 2050. China is set to achieve top ranks by 2050, while India remains near the bottom.