Present situations are known to all; however, it is the future which is unforeseen. People put more interest in future as most current activities are undertaken to gain future benefits. Parents are worried about the future of their children, youngsters work hard to secure their future, organizations undertake investments for future gains and so do economies worry about their future. Not only individuals want to improve their economic standards, but also countries are in the race of becoming an economic power. Forecasting is an essential task for economists. They have to predict the future conditions of the economy while studying the nature of variables in current time. Forecasting is important for policy makers, economies, stock markets and the businesses.
The World is changing fast, the world we see know is way too different from past few decades. Therefore, learning about what it would look like in 10 or 20 years from now seems interesting. PricewaterhouseCoopers (PwC) which is a multinational service provider issued an interesting report forecasting the world of 2050. The report which is titled as “The long view: how will the global economic order change by 2050” was published in February 2017. It predicts the world’s 32 most powerful economies of 2050. The analysis which predicts shifts in global economic powers is of great interest for policy makers, long-term investment seekers, businesses, students, and economists. The report uses fundamental drivers of growth to predict the 32 most influential economies of 2050 which currently account for 85% of world’s GDP.
The analysis is made by using long-term economic growth model. Macroeconomists have used Purchasing Power Parity (PPP) as a tool to determine the economic productivity and standards of living of different countries over a specific time. The report tends to cast out long term projections based on short-term economic and political trends. The report is not reliable in making precise economic predictions, but it is very likely to present a broader picture of future economic powers. The report states that global economy size is likely to be doubled by 2042 and therefore more than doubled by 2050. The global economic growth will be accelerated by emerging market economies rather than advanced economies. The economist predicts that Vietnam, India, and Bangladesh to be three of the world’s fastest growing economies over this period.
Therefore, we will observe a shift of economic power from advanced economies to emerging ones. As per the projections, the group of emerging market economies (E7) would have a share of 50% in world’s GDP in 2050, while the share of advanced economies (G7) will decline to 20%. This is well illustrated in the following figure. The following figure has been developed by PwC to explain the shifts in 32 of the world’s economic powers. Except for China: which will continue to be in the lead, all economies will experience a shift. Power engines like Germany and Japan are to go through a great economic shock. Emerging economies are likely to take over their positions.
Even though these projections are not truly valid but future is always full of surprises. Who could have predicted the United States as a major economy of the 21st century while it was going through a civil war, conflicts with foreign powers, three presidential assassinations, and various economic crises in the 20th century?
32. Netherlands — $1.496 trillion.
31. Colombia — $2.074 trillion.
30. Poland — $2.103 trillion.
29. Argentina — $2.365 trillion.
28. Australia — $2.564 trillion.
27. South Africa — $2.570 trillion.
26. Spain — $2.732 trillion.
25. Thailand — $2.782 trillion.
24. Malaysia — $2.815 trillion.
23. Bangladesh — $3.064 trillion.
22. Canada — $3.1 trillion.
21. Italy — $3.115 trillion.
20. Vietnam — $3.176 trillion.
19. Philippines — $3.334 trillion.
18. South Korea — $3.539 trillion.
17. Iran — $3.900 trillion.
16. Pakistan — $4.236 trillion.
15. Egypt — $4.333 trillion.
14. Nigeria — $4.348 trillion.
13. Saudi Arabia — $4.694 trillion.
12. France — $4.705 trillion.
11. Turkey — $5.184 trillion.
10. United Kingdom — $5.369 trillion.
9. Germany — $6.138 trillion.
8. Japan — $6.779 trillion.
7. Mexico — $6.863 trillion.
6. Russia — $7.131 trillion.
5. Brazil — $7.540 trillion.
4. Indonesia — $10.502 trillion.
3. United States — $34.102 trillion.
2. India — $44.128 trillion.
1. China — $58.499 trillion.
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