Turkey will surpass Germany, Russia and Japan to become the fifth largest economy in the world by 2030, while China will unsurprisingly emerge as the world’s number one economic power by 2020, according to U.K.-based multinational bank Standard Chartered Plc’s long-term forecasts.
The projection foresees a major shake-up of the world’s current economic order, envisioning seven emerging markets taking over the top 10. The U.K., France and Italy are nowhere to be seen in the select 10.
Using purchasing power parity exchange rates and nominal gross domestic product (GDP), Standard Chartered economists have predicted that India will comfortably take over the U.S. to grab second place, while Indonesia will break into the top 5, just above Turkey by 2030.
“India will likely be the main mover, with its trend growth accelerating to 7.8% by the 2020s partly due to ongoing reforms, including the introduction of a national goods and services tax (GST) and the Indian Bankruptcy Code (IBC),” the report said.
Asia — led by none other than China — will power global growth, and its share of global GDP will match that of the euro area and the U.S. combined, to reach 35% by 2030, the economists project. China will remain no. 1 in the next decade, but its growth will slow to 5% by 2030 as part of the natural slowdown due to the economy’s size.
According to the forecasts, the world’s 10 largest economies by nominal GDP by 2030 will be as follows:
- China: $64.2 trillion
- India: $46.3 trillion
- U.S.: $31 trillion
- Indonesia: $10.1 trillion
- Turkey: $9.1 trillion
- Brazil: $8.6 trillion
- Egypt: $8.2 trillion
- Russia: $7.9 trillion
- Japan: $7.2 trillion
- Germany: $6.9 trillion
“Our long-term growth forecasts are underpinned by one key principle: countries’ share of world GDP should eventually converge with their share of the world’s population, driven by the convergence of per capita GDP between advanced and emerging economies,” Standard Chartered economists led by David Mann wrote in the report.
A majority of the world’s population will enter the middle-class income group by 2020. This class’ growth, fueled by urbanization and education, will help counter the effects the ageing population will have on global growth and many economies, the report adds.
However, it points out that about 100 million new jobs must be created in the manufacturing and service sectors by 2030 to meet the massive employment demand created by such a young demographic.
