The United States will fall to a third place in the ranking of the largest economies in the world. China and India will overtake the U.S. by 2030, and it is unlikely that we will ever get the throne back.
UK based financial services giant Standard Chartered Plc. predicted in its annual ranking of the largest economies in the world. In the next decade, China will solidify its place as the largest economy in the world. They expect India will surpass the United States within the same period, as the analysis forecasts that the South Asian country will move up to second place.
In a note, Standard Chartered Economists, under the leadership of David Mann (Chief Economist of Standard Chartered in Asia) said:
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 measured both Gross Domestic Product (GDP) and Purchasing Power Parity (PPP) exchange rates. The financial services firm is projecting that India’s rate of economic growth will accelerate to 7.8% by the 2020s. China’s economic growth will slow down, adjusting to a steady 5.0% growth at 2030.
India is predicted to be the second largest economy in the world by PPP terms and is expected to have become the most populous country in the world.
Emerging Markets are Taking Over the Global Market
With the predictions, drastic changes are expected to occur within the top 10 economies in the world over the next decade. It is predicted that there will be a significant shift from western countries to their emerging counterparts, particularly within Asia.
In 2018, Asia had a 28% share of the global GDP. The forecast predicted that this share is likely to rise to 35% by 2030, meaning that the continent will be on par with the United States and Europe combined.
A Shakeup in the Top 10
The forecast predicts that Indonesia will climb to fourth position by 2030, with Turkey coming in at fifth position. In addition, Brazil, the only country from Latin America, and Egypt, the only Middle Eastern entry, are expected to reach sixth and seventh positions respectively.
The forecast predicts that Russia will come in eighth, while Japan and Germany will take the last two spots. If the study turns out to be correct, it would mean that countries such as Canada, France, and Great Britain will be pushed out of the top 10. The world dynamics will drastically change the coming decades.