Jan 07, 2011
G7 economies to be eclipsed by emerging economies within a decade – reportBack
Africa|Industrial|Pricewaterhouse|PwC|Africa|Asia|Argentina|Australia|Brazil|Canada|China|France|Germany|India|Indonesia|Italy|Japan|Mexico|Nigeria|Russia|South Africa|Turkey|United Kingdom|United States|Vietnam|Advisory Services|Gross Domestic Product|John Hawksworth|Power|Western Europe
© Reuse this
So predicts global industry assurance, tax and advisory services group Pricewaterhouse-Coopers (PwC) in a report released on Friday and entitled “The World in 2050”. The company credits the global financial crisis with accelerating this process.
On the basis of purchasing power parity (PPP) calculations of gross domestic product (GDP), the E7 (China, India, Brazil, Russia, Mexico, Indonesia and Turkey) will collectively overtake the G7 (the US, Japan, Germany, UK, France, Italy and Canada) in 2017. If the E7 and G7 GDPs are calculated in market exchange rates (MERs), then the overtake point comes later – 2032.
Regarding individual countries, and using PPP calculations, PwC forecasts than China will overtake the US in 2018 to become the world’s biggest economy, while India will overtake Japan (to become the number three economy) even sooner – this year (2011), in fact. Russia will overtake Germany in 2014, Brazil will overtake the UK in 2013, Mexico eclipse France in 2028, Indonesia overhaul Italy in 2030 and Turkey overtake Canada in 2020.
India could overtake the US, relegating the American economy to third place, in 2050.
Again, if the GDP calculations are made in MERs, the overtake points come later. Thus, China would overtake the US in 2032, India pass Japan in 2028, Russia overhaul Germany in 2042, Brazil go ahead of the UK in 2023, Mexico pass France in 2046, Indonesia overtake Italy in 2039 and Turkey would exceed Canada in 2035.
PwC points out that, as MER calculations can be extremely volatile and tend to underestimate the size of emerging and developing economies, economists often prefer to use PPP calculations to make international comparisons. In the case of both sets of calculations, the dates predicted are estimates and, the company warns, are subject to “many uncertainties”.
Concerning the G20 group, which includes both the biggest developed and emerging economies, the forecast is that by 2050 Australia and Argentina are likely to have dropped out of its ranks, and could be replaced by Vietnam and Nigeria.
“In many ways,” states PwC chief economist John Hawksworth, “the renewed dominance by 2050 of China and India, with their much larger populations, is a return to the historical norm prior to the Industrial Revolution of the late 18th and 19th centuries that caused a shift in global economic power from Asia to Western Europe and the US – this temporary shift in power is now going into reverse.”
The report highlights that the greatest increase in a single country’s share of global GDP is forecast for India, and not China. In MER terms, India accounted for 2% of global GDP but by 2050 this could reach 13%.
However, the per capita PPP GDPs of Brazil, China and India will continue to lag far behind those for the US, UK and of G7 as a group, to (probably well) beyond 2050.
Regarding South Africa, PwC expects this country’s economy to grow at an annual average real rate of some 3,8% from 2010 to 2050. Over the same period, Nigeria’s annual average real growth rate is forecast to be about 6,5%.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Updated 41 minutes ago While the global economy continues to battle growth headwinds as it slowly emerges from a lingering post-recessionary phase, the greatest inhibitors to South African economic development are largely domestic and within government’s control, Finance Minister...
Updated 49 minutes ago Building materials firm Infrasors said on Friday that FD Marius Potgieter, who had occupied the position since July 1, 2009, had tendered his resignation and would leave the company with immediate effect. Construction supplies manufacturer Afrimat FD and Infrasors...
Updated 1 hour 2 minutes ago Telecommunications group Telkom on Friday announced that, following extensive facilitated consultations and deliberations, management and organised labour had reached consensus that the company’s current restructuring process would proceed. “The parties have...
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
This Week's Magazine
South African construction company Group Five says work on the rehabilitation of the 800 km stretch of the Plumtree–Mutare highway, in Zimbabwe, should be completed by the end of this year. Giving evidence before the Parliamentary Porfolio Committee on Transport...
The Space Operations division of the South African National Space Agency (Sansa) revealed on July 17 that it had supported the successful launch of the US National Aeronautics and Space Administration’s Orbiting Carbon Observatory-2 (OCO-2) satellite on July 2. The...
Phase 1A of Johannesburg’s Rea Vaya bus rapid transit (BRT) system should carry around 42 000 people a day, while it was been expected that Phase 1B, rolled out last year, would add another 60 000 daily passengers. However, the entire system is currently carrying...
A stormwater project in Bedforview, east of Johannesburg, has stalled for eight months after project managers in the Ekurhuleni municipality resigned and municipal managers were placed on special leave without designating replacements. Construction to reinforce the...
The design of the Beit Bridge border post is the biggest impediment to efficient freight movement between Zimbabwe and South Africa, says Cross-border Road Transport Agency CEO Sipho Khumalo. Beit Bridge is the busiest border post in Africa. A research study on the...