Emerging market countries will increase their share of global GDP over the next two decades, continuing the shift in global economic power away from the West, according to data from PwC. The report asks how the global economic order will change by 2050 and looks at 32 of the largest economies, looking at growth in GDP measured at purchasing power parity (PPP).
China, India and Indonesia emerge on global stage
What are currently considered emerging markets could make up six of the seven biggest economies by 2050. US dominance could be superseded by China in just 13 years (it is already bigger than the US based on GDP in PPP terms). And the US is likely to fall into third place behind India by 2050 - again in terms of GDP measured at PPP. Indonesia is also expected to become far more important than it is currently and could become the fourth world economy by 2050, overtaking both Japan and Germany.
EU27 share of GDP could fall below 10%
While the economic power shift is set to move from the US towards China and India in the next 23 years, the growth of emerging markets will also push the global share of EU countries lower. The EU27’s share of world GDP could fall to below 10 per cent by 2050, says PwC. The report also makes some other projections – all of which depend on some pretty big 'ifs':
- the UK could grow faster than the EU27 average in the long run IF it can remain open to trade, investment and talented people after Brexit;
- Turkey could overtake Italy by 2030 IF it can overcome current political instability and make progress on economic reforms; and
- Nigeria has potential to rise up the global GDP rankings, but only IF it can diversify its economy and improve governance standards and infrastructure.
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