The UK is expected to be kicked out of the top 10 world’s largest economies by 2050, a new study by PwC shows. The shift in the top 10 is, according to the firm, the result of a global economic power shift. The firm however also notes that although the UK is expected to be surpassed as one of the top 10 largest economies, the country is forecasted to experience bigger growth than its G7 peer group.
Between 2014 and 2050, the world economy is projected to grow at an average of around 3% per annum, resulting in a doubling in size by 2037 and nearly tripling by 2050. Professional services firm PwC recently released its latest report of the ‘The World in 2050’ series, which looks into the growing world economy and the division per country. This report shows that the UK is predicted to drop out of the top 10 of the world’s largest economies by 2050, resulting from the global economic power shift away from the US, Western Europe and Japan.
The UK, currently found on the 10th place on the list, is forecasted to be surpassed by Mexico (number 11 in 2014) and by Nigeria (number 20 in 2014) by 2050, as a result of which the country will be kicked out of the top 10. Other Western European countries expected to drop in the list are Germany (from number 5 in 2014 to number 10 in 2050) and France (from 8 in 2014 to 13 in 2050). The countries that made up the top 10 in 2014 will mostly still be in the top 10 in 2050, albeit in a different order. China is expected to stand its ground as the number 1 biggest economy, while the US and India, numbers 2 and 3, are expected to switch places by 2050.
According to PwC’s list, Vietnam, in addition to Nigeria, is set to be one of the fastest growing large economies over the period to 2050, rising from 32 in 2014 to 22 in 2050, as well as the Philippines, rising from 28 in 2014 to 20 in 2050). Japan will experience the slowest growth, fall from 4th to 7th place in the global GDP rankings over the period to 2050. According to PwC, this is partly driven by a steadily declining population.
Although the UK is expected to fall out of the top 10, the report also finds that the UK is doing well compared to its G7 peer group in terms of growth – projected at 2.4% per annum over the period to 2050, compared to the average around 1.5-2% per annum for the major Eurozone economies.
“But despite expecting the UK to drop out of the top 10 largest economies by 2050, the projected average UK growth rate to 2050 is stronger than other large Western European economies such as Germany, Italy and Spain that face even bigger challenges than the UK from ageing populations and slowing productivity growth,” explains John Hawksworth, PwC’s Chief Economist.
Concluding with an advice, Hawksworth says: “Europe needs to up its game if it’s not to be left behind by this historic shift of global economic power, which is moving us back to the kind of Asian-led world economy last seen before the Industrial Revolution.”