BY Fraser Tennant
A global economic power shift could put advanced economies such as North America, Western Europe and Japan on a backward trajectory by 2050, according to the latest in PwC’s series of ‘The World in 2050’ reports.
Published this week, the report – ‘The World in 2050: Will the shift in global economic power continue?’ – presents long-term projections of potential GDP growth up to the year 2050 for 32 of the world’s largest economies (84 percent of total global GDP).
Key findings in the PwC report include: (i) UK GDP is likely to fall behind Mexico and Indonesia by 2030 – this could push the UK and France out of the top 10 by 2050; (ii) long-term UK growth (averaging 2.4 percent to 2050) could be better than other large EU economies, including Germany, France and Italy; (iii) China will clearly be the largest economy by 2030, but its growth rate is likely to revert to the global average in the long run; (iv) India could challenge the US for second place by 2050; and (v) Nigeria and Vietnam are set to be the fastest growing large economies over the period to 2050.
“Emerging economies like Indonesia, Brazil and Mexico have the potential to be larger than the UK and France by 2030," claims John Hawksworth, PwC’s chief economist. “Indonesia could rise as high as fourth place in the world rankings by 2050 if it can sustain growth-friendly policies.”
The PwC report also suggests that the world economy is set to grow at an average of around 3 percent per year from 2015 to 2050, doubling in size by 2037 and then nearly tripling by 2050. However, the report concedes that there is likely to be a slowdown in global growth after 2020.
A forthright Mr Hawksworth said “Europe needs to up its game if it’s not to be left behind by this historic shift of global economic power, which is moving us back to the kind of Asian-led world economy last seen before the Industrial Revolution.
“The US may hold up better, provided it can remain at the global technological frontier, and the UK could also perform well by G7 standards if it remains open to trade, investment, people and ideas.”