The strongest economies in the world today are a pretty obvious list. The US remains well out in front controlling almost a quarter of the world’s total GDP. However, China finds itself ahead of every other nation and is fast catching up with the country who has held on to the top spot for a number of years.
The rest of the top five in 2018 contains the usual suspects including Japan, Germany and the UK, but what’s going to happen in the future? Will China eventually overtake the US? What other countries will be a the forefront of the world economy in the future? Will there be any surprises? As the cost for accommodation in NYC and the cost of living in London continues to rise, is this sustainable? We’ve taken a look and here are some predictions.
Fastest Growing Economies
A recent list published as part of the IMF’s World Economic Outlook shows some surprising inclusions on the fastest growing economies in the world list. Top of the list, after years in the wilderness, comes Myanmar (previously Burma), followed by Ivory Coast and Bhutan. India is the fourth fastest growing economy and probably the only one in the top ten that’s going to threaten at the top of GDP rankings in the next twenty years.
What the list does show, however, is how Asia and Africa are experiencing growth at a rapid pace and have been since the early 1980s. When looking at these figures it must be remembered that they are only concerned with GDP. Although this provides a valuable insight into how well a country is performing it does not take into account the actual average quality of life in these countries. This should be a much more prominent consideration according to many experts.
Largest Economies in 2050
PriceWaterhouseCoopers have predicted who they believe will be at the top of the world tree in thirty two years time. Of course in 2050 the world will be a very different place to what it is today, not only in terms of its monetary landscape but politically too, there is an awful lot of ‘maybes’ when it comes to predictions such as these.
In their predictions, PwC does take into account standard of living as well as the usual economic factors to come up with a ranking system based on overall purchasing power parity.
Most experts agree that China will be the dominant market force in the coming years and PwC are no exception. They are expected to eclipse the US as they continue to grow whilst the former continues to shrink, albeit slowly.
Most experts again agree that India will also continue to grow and become an even more significant market force. However, PwC predict that India will, by 2050, also overtake the US in terms of its market dominance.
The US is not predicted to fall too far though and will maintain its position in the top three, whereas other economies will fall much further behind. Though maintaining their place in the top ten it is predicted that Japan, Germany and the UK will fall to the bottom half of the chart. They will likely be replaced by newcomers Indonesia, Brazil, Russia and Mexico. This is despite the Russian economy stalling in recent years.
China’s rise to power can be attributed mainly to one thing, its incomparable productive capacity. The sheer volume that China is able to produce at comes from targeted public investments. When foreign capital and companies become involved they do so within a strict framework of regulations put in place by the Chinese government.
This framework has ensured that China has built up an impressive list of foreign creditors, including the US itself.
The infrastructure needed to build production of this magnitude requires plenty of raw materials. These raw materials are supplied from exporting countries in Africa and South America. China now has mutually beneficial contracts set up with countries who previously saw the US as a primary customer.
The economy in India is expanding rapidly, in terms of speed of growth it is even outperforming its neighbour across the Himalayas. In 2018 it was the fastest growing world economy. It is seen by most as being one of the next world superpowers.
Whilst it is still emerging its obvious advantages include that it has a young population and natural resources which will become more valuable as the age of fossil fuels comes to a close.
However, India has a number of well reported economic, social and political problems to overcome before it really can be considered a major player on the world stage.
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