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Global macroeconomic trends to 2050

Jun 24, 2015 | News

(24 June 2015) – The long-term projections of The Economist Intelligence Unit (EIU), published today, provide information to anticipate development issues. The EIU has recently completed an extension of its forecast horizon to 2050 and considers some key trends.

China is expected to overtake the United States in 2026 in nominal GDP in US dollar terms and maintain its position as the largest economy to 2050. India is expected to move up the rankings to third place, with real growth averaging close to 5% up to 2050. Indonesia and Mexico are expected to leap into the top ten world economies from 16th and 15th place in 2014 to fourth and ninth place respectively by 2050.

The EIU does not expect the representation of Western economies within the top-ten listing to become insignificant. The United States, Germany, the United Kingdom and France will all move down the rankings, but only Italy will lose its place within the top ten.

By 2050 China and India will each be richer than the next five (Indonesia, Germany, Japan, Brazil, and the UK) put together. This will represent a scale of wealth relative to the rest of the top ten that is unique in recorded history. Given China’s and India’s economic might, they will take on a much bigger role in addressing global issues such as climate change, international security and global economic governance.

Most of Europe and East Asia is expected to see labour-force declines, representing a severe drag on growth. Within Europe, Greece, Portugal and Germany will see their available labour forces decline by over one- fifth. The comparable spending power of a Chinese consumer compared with that of a US consumer will increase from 14% in 2014 to just under 50% – a significant catch-up.

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