The economy has been billed to overtake France and United Kingdom by 2050, PwC economists have forecast in its latest report: titled: The world in 2050: Will the shift in global economic power continue?
According to the report, China will be the largest economy by 2030, while India may challenge US for second place by 2050 while forecasting that the emerging economies of Nigeria, Indonesia and Mexico could push the UK and France out of the top ten economies of the world by 2050 provided they are able to build their institutions to global standards, diversify their economies and sustain growth friendly policies.
It stated further that Philippines, Vietnam and Malaysia are set to be notable risers with Colombia and Poland growing more strongly by 2050 than Brazil and Russia.
The PwC Nigeria’s Chief Economist and co-author of the report, Mr. Andrew S. Nevin, said: “Over the past decade, Nigeria has boasted superior economic growth and, with the right reforms and investments, Nigeria could become one of the world’s leading economies by 2030, with further progress by 2050.
“Nigeria’s potential advantages for future growth include a large consumer market, a strategic geographic location, and a young and highly entrepreneurial population.’’
With drop in oil price which could thwart this possibility as a result of the attendant pressure on fiscal policy, he said Nigeria will need to manage the oil price decline effectively at all levels of government and create a sustainable platform for diversification into the sectors.
“We are all aware of the significant headwinds created by the rapid drop in the oil price, putting pressure on the fiscal and monetary systems, as well as reducing economic growth in the short term. To achieve its long-term economic potential, Nigeria will need to manage the oil price decline effectively at all levels of government and create a sustainable platform for diversification into the sectors that we know will drive the economy in the future – including power, agriculture, manufacturing, telecoms, hospitality and real estate,” said Nevin.
With a long-term projections of potential GDP growth up to 2050 for 32 of the largest economies in the world, covering 84 per cent of total global GDP, the PwC report projects insist that the current global economic power shift away from the established advanced economies in North America, Western Europe and Japan will continue over the next 35 years – despite a projected slowdown in Chinese growth after around 2020.
Insisting that the world economy is projected to grow at an average of just over three per cent per annum from 2014-50 – doubling in size by 2037 and nearly tripling by 2050, the report which tipped China as the largest economy by 2030 on any measure, however stated that it expect China’s growth rate to slow markedly after around 2020 as its population ages, high investment rate runs into diminishing marginal returns.
It stated that China needs to rely more on innovation than copying to boost productivity. “Eventual reversion to the global average has been common for past high growth economies such as Japan and South Korea and we expect China to follow suit,” it stated.
Other highlights from PwC’s projections are that India has the potential to sustain its higher growth rate for longer and become a $10 trillion economy by around 2020 in purchasing power (PPP) terms, or around 2035 at market exchange rates.
This prediction is however, predicated on India making sustained progress on infrastructure investment, institutional reforms and boosting education levels across the whole population while emerging economies like Indonesia, Brazil and Mexico have the potential to be larger than the UK and France by 2030, with Indonesia possibly rising as high as fourth place in the world rankings by 2050 if it can sustain growth-friendly policies the report added.
