IMF predicts that world economy will be centered on Asia by the year 2050, shifting from North America, Western Europe and Japan. And three large countries of South Asia- India, Pakistan and Bangladesh – are primed to lead this economic change.
In terms of Purchasing Power Parity or PPP, India is now in the third place and by 2050 they will likely to put behind USA and become the 2nd largest economy in the world. In terms of economy size Pakistan will rise to 15thÂ position from its current rank of 25, whereas Bangladesh is projected to be 23rd from current 31stÂ position. Asian economic giant China has already overtook the United States (US) in terms of PPP in 2014 and now is ranked as the world’s largest economy. China is also projected to exceed the US in terms of market exchange rate or MER before 2050 and in terms of PPP they will be 150% of the US economy. Â This data has been published in a recent IMF report, “The World in 2050”. According to the report, if the current world economy can maintain an average growth rate of 3 percent until 2050, the global economy will double by the year 2037, and will be triple of its current size by 2050.
During the course of development, the center of the world economy will see significant changes. The world economy hub will lean towards China, India and other emerging economies from already matured economies of the West and Japan. China by the year 2028 will reach the top in terms of MER (market exchange rate), pulling ahead of the US in the process. Although India reckoned to take 2nd place from the US in terms of PPP, they will still be behind in terms of MER by 2050.
During the course of this forecasted economic shuffle, countries like Japan, Russia, France, Germany, and the UK are likely to fall behind in the ranking. And countries like Brazil, Indonesia, Mexico, Nigeria, Turkey and Pakistan are expected to rise up in the rank. According to the IMF forecast India’s economic growth rate will be higher than that of China but Beijing will still have larger economy.
As per PPP, China’s economy will priced around 61,079 billion USD by 2050 and the value of the Indian economy will be 42,205 billion USD (taking into account the 2014 inflation rate). Currently this margin between the Chinese and Indian economy is 10,000 billion USD which will be doubled by 2050. Among the South Asian countries, Pakistan has an economy sized 884 billion US dollars. By 2030 this will increase to 1,832 billion USD and by 2050 it will be 4,253 billion USD. At that time they will be ranked as 13th largest economy in the world.
Bangladesh, another emerging economy in South Asia has economy size of 536 billion USD. Â By 2030 it will be 1291 billion USD and by 2050 it will be 3339 Billion USD. During this period the country’s rank in global economy will go up to 29 and 23 respectively from current 31stÂ position. By 2050 Bangladesh economy will be bigger than the countries like Iran, Malaysia, Spain, South Africa and Australia. This only considers PPP or purchase power parity. This PPP is calculated to compare living cost in various countries in a fixed dollar rate and widely accepted as a measure stick of economy throughout the world.
32 countries have been brought under review in this global economic report. These 32 country’s economy combinedly equals 84 percent of total world economy. In this report IMF compared to 7 developed countries to 7 emerging economies to explain the flow of changes that is taking place right now. Â UK, France, Germany, Italy, Japan, United States and Canada, commonly referred as G-7, are the seven developed economies. On the other hand, the seven emerging economies also known as E-7 consists of China, India, Brazil, Mexico, Russia, Indonesia and Turkey. In 2014, the economic size of G-7 and E-7 was almost equal considering the PPP. But in 2050 emerging seven country’s economy will be double that that of seven developed countries.
Currently on the list of the global top 10 economies are 5 from G-7 countries and 5 from E-7 countries. By 2050 G-7 will have only three positions in the top ten economies and six will be from E-7 economies. Nigeria will be the other one. They are set to be in 9thÂ position from current 20thÂ position.
The following counties will see significant development by 2050. Indonesia from 9 to 4, Mexico from 11 to 6, Brazil from 7 to 5, Saudi Arabia from 14 to 12, Egypt from 22 to 16, Vietnam from 32 to 22 and Philippines from number 28 to 20th position. On the other hand, the following countries are likely to see the most decline. France from 8 position to 13, Japan from 4 to 7, Germany from 5 to 10, Spain from 16 to 26, Iran from 18 to 25, South Korea from 13 to 17, Canada from 15 to 19, Italy from 12 to 18, Australia from 19 to 28, Argentina from 24 to 30 and the Netherlands from 26 to 32.