PwC, a prominent financial services firm better known as PricewaterhouseCoopers, has published a report on the future of the global economy, which is projected to more than double between now and 2050. In the span of just 14 years, today’s 32 largest economies — which together comprise 85 percent of global GDP — will experience highly divergent fortunes, as current heavyweights will cede ground to up and coming powers.
Here are some of the key breakdowns highlighted in the report:
- Emerging markets (E7) could grow around twice as fast as advanced economies (G7) on average
- As a result, 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 third place in the global GDP rankings while the EU27’s share of world GDP could fall below 10% by 2050
- UK could be down to 10th place by 2050, France out of the top 10 and Italy out of the top 20 as they are overtaken by faster growing emerging economies like Mexico, Turkey and Vietnam respectively
- But emerging economies need to enhance their institutions and their infrastructure significantly if they are to realise their long-term growth potential.
In other words, today’s poorer and weaker countries will very soon become tomorrow’s major players on the international stage. While economic power does not always lend itself to political or military influence, it very well helps, in this globalized world (rising nationalism and protectionism notwithstanding).
For the more visually oriented data lovers (myself including), here are some infographics showing the main trajectories of the world economy:
The report makes clear that these projections are not forgone conclusions, nor are they guaranteed to lead to prosperity. It warns that the current slide back towards economic and political nationalism could stymie growth around the world. It also encourages countries to do more to ensure that this economic growth– which is disproportionately being achieved by the poorest, youngest, and largest populations — is being shared to benefit most of society (inequality remains a growing problem both globally and in many of the fastest growing countries). There will also need to be more investment in green technologies that make sure that this growth doesn’t further degrade the environment.
Still, the prospect of billions more people having an opportunity to enjoy a better standard of living — in the face of rapidly decline global poverty — is exciting. Here’s hoping it doesn’t get squandered, though greater economic growth usually (though not always) brings about greater political participation.
Check out or download the full report here.