It's barely 2011 but Karen Ward at HSBC is looking ahead what the world will look like in the middle of the century. By 2050, China is predicted to have overtaken the U.S. to become the world's largest economy. India is forecast to be in third place, followed by Japan. Nineteen of the top 30 will be today's 'emerging economies,' which will collectively be bigger than the developed world。
How does Europe look？Ms. Ward puts Germany in fifth place, and on its heels in sixth, the U.K., both one slot lower than today. France is down three slots in ninth, under Brazil and Mexico. Italy is down four places in 11th, below Canada and just ahead of Turkey. Spain is down two places, to 14th, below South Korea and just ahead of Russia。
China's annual economic output by 2050 is forecast to reach $24.6 trillion (in 2000 dollars)， the U.S. $22.3 trillion, India $8.2 trillion, Japan $6.4 trillion, Germany $3.7 trillion and the U.K. $3.6 trillion. France is a $2.8 trillion economy and Italy a $2.2 trillion one。
Why does the U.K. do relatively well？A good part of the answer is demographics, a factor that helps the U.S. too. By 2050, the U.K. will have 72 million people, compared with Germany's 71 million and France's 68 million, the forecast suggests。
She adds: 'The small-population, ageing, rich economies in Europe are the big losers. Switzerland and the Netherlands slip down the grid significantly, and Sweden, Belgium, Austria, Norway and Denmark drop out of our Top 30 altogether.'
Of course, that doesn't make them poor. The Netherlands, down eight places as the world's 23rd economy, is predicted to have per capita income of $46,000 (in 2000 dollars)， compared with just over $26,000 today. Switzerland's 9 million people are forecast to enjoy an average income of $84,000, compared with $39,000 today. China's 1.4 billion people are forecast to have income of $17,000 per head, compared with $2,400.
The calculations assume continuing open borders and no major wars or natural disasters. They are based on three determinants, drawing from the work of Harvard University's Robert Barro: the starting level of per capita income; human capital, which relates to levels of education, health and fertility; and economic governance, which refers to the variables such as the degree of monetary stability, property rights, democracy, the rule of law and government size。
