China has already overtaken the US as the world’s top economy, while India is projected to overtake the US into 2nd position by 2050, according to PwC. With an average annual growth of 2.6 percent, consulting firm expects the global economy to double in size within a quarter of a century.
The US will drop to 3rd place in the rankings, while Indonesia and Brazil are expected to climb to 4th and 5th position respectively. Economists at the consulting firm expect 6 of the 7 largest economies by 2050 will be emerging markets, led by China and India.
In a report entitled “The long view: how will the global economic order change by 2050?,” PwC ranked 32 countries by their projected global GDP, measured by purchasing power parity (PPP) (purchasing power parity accounts for the different prices levels across countries).
How the world will look in 2050 – new forces are driving the world economic order:
The authors said that so-called “E7 group” consisting of Brazil, China, India, Indonesia, Mexico, Russia and Turkey could be double the size of the “G7 group” of the US, Canada, France, Germany, Italy, Japan and the UK by 2040.
The report also predicted the “rise of China and India” would reduce the share of world GDP accounted for by Europe. In PPP terms, China is already the world’s largest economy and will continue to be so in 2050, India’s share is projected to be larger than the EU 27 by 2035, with the EU’s share of the world economy (at PPPs) projected to drop from 15% to 9% by 2050.
But the other side of the argument when economies (China, India, and the US) are ranked by GDP per person, which is seen as a better gauge of how growth is translating into changes in living standards.
By that measure, the U.S. is still the world’s top economy in 2050 followed by Germany, the UK, and Canada. But China and India are closing the income gap with those at the top.
In 2016, U.S. GDP per capita was almost 4 times the size of China’s and almost 9 times the size of India’s. By 2050, these gaps are projected to close to around double China’s and around three times India’s, demonstrating long-term income convergence.
The world’s largest economies in 2050
|Rank||Country||Projected GDP (PPP) in million|