China to overtake U.S. in 15 years
In its annual report The World Economic League Table this morning CEBR 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 or 5, 10 and 15 years ahead.
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.
CEBR's 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.
Slow growth, a weakening currency and for some countries adverse demographic dynamics hit the European economies. CEBR makes 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.
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. 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. ■