UK to ‘drop out of top 10 world economies by 2030’
Standard Chartered predicts China and India will overtake US, with Britain dropping off the top table entirely
China and India will overtake the US as the world’s largest economies by 2030, with the UK falling out of the top ten entirely, according to a major new report by Standard Chartered.
Using a combination of purchasing power parity (PPP), exchange rates and nominal GDP, analysts at the bank predict China will most likely become the world's biggest economy by some point in 2020.
Experts are divided on whether GDP by PPP, which accounts for diverging purchasing power between rich and poor countries, is a better indicator of economic wellbeing compared to simple market exchange rates.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
“Some economists argue market exchange rates give a better indication of the relative importance of national economies in the global trade and financial system”, says Ben Chu in The Independent, “but other economists argue that PPP gives a better indication of shifts in a developing country’s domestic consumer demand.”
By using PPP, Standard Chartered have estimated that by 2030, the size of China’s economy will be $64.2 trillion, with India’s at $46.3 trillion and the United States’ just $31 trillion.
“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 bank said.
“India's rise will also reflect a growing trend of Asia becoming the dominant region of the planet economically speaking as the size of its output starts to match the size of its population,” says Business Insider.
By 2030 seven of the 10 largest economies will be in Asia. Asian GDP will account for roughly 35% of global GDP, up from 28% last year, and just 20% in 2010; the equivalent to the output of both the eurozone and the US combined.
Much of this has been driven by the rise of the global middle class, which Standard Chartered predicts will encompass a majority of the world’s population by 2020.
The big losers from this shift in the global balance of power will be historic western powerhouses. The UK and France will fall out of the top ten largest world economies altogether, with Indonesia, Turkey and Egypt taking their place.
The World Bank expects Egypt to grow by 5.6% this year, making it the fastest growing economy in the Middle East and North Africa, reports Xinhua.
“Yet assuming an uninterrupted catch-up path for poorer countries is questionable,” says Chu.
“Crises are inevitable. A few years ago many economists were projecting rapid growth in Brazil, but instead the country fell into a savage recession. One cannot rule out such a temporary reversal for China or India,” he writes.
Standard Chartered’s top 10 economies by nominal GDP using PPP in 2030 (in trillions of dollars):
1. China $64.2
2. India $46.3
3. US $31.0
4. Indonesia $10.1
5. Turkey $9.1
6. Brazil $8.6
7. Egypt $8.2
8. Russia $7.9
9. Japan $7.2
10. Germany $6.9
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Band Aid 40: time to change the tune?
In the Spotlight Band Aid's massively popular 1984 hit raised around £8m for famine relief in Ethiopia and the charity has generated over £140m in total
By Rebekah Evans, The Week UK Published
-
Starmer vs the farmers: who will win?
Today's Big Question As farmers and rural groups descend on Westminster to protest at tax changes, parallels have been drawn with the miners' strike 40 years ago
By The Week UK Published
-
How secure are royal palaces?
The Explainer Royal family's safety is back in the spotlight after the latest security breach at Windsor
By Chas Newkey-Burden, The Week UK Published
-
India's lengthening working week
Under The Radar Fourteen-hour work days, meetings during holidays, and no overtime are just part of the job in India's workplace culture
By Harriet Marsden, The Week UK Published
-
'Super Mario' to the rescue: can Draghi fix Europe's economy?
Today's Big Question Former central bank boss calls for more innovation and investment – but faces 'too many moving parts for a straightforward fix'
By Elliott Goat, The Week UK Published
-
Is the UK economy returning to normal?
Today's Big Question Tories claim UK has 'turned a corner' while Labour accuses government of 'gaslighting' public
By The Week UK Published
-
Securonomics: what is Rachel Reeves' economic plan and will it work?
The Explainer Focus on economic security and the resilience of industry in an uncertain world is 'key to growth', say Labour
By The Week UK Published
-
Has life in Russia regressed since the Ukraine invasion?
Today's big question The 'war economy' has defied Western sanctions as ordinary citizens rally round the regime
By Elliott Goat, The Week UK Published
-
The next superpowers: who will hold sway in 2050?
feature China overtakes the US, India emerges, great power ‘blocs’ rule, or tech giants take over – some of the geopolitical possibilities on the horizon
By The Week Staff Published
-
What’s causing China’s deflation crisis?
Today's Big Question Stalling post-pandemic recovery and weakening demand for exports could lead to growth spiral
By The Week Staff Published
-
Sticky inflation and sluggish growth: why does UK economy continue to struggle?
Today's Big Question Food prices, Brexit and the Bank of England have been blamed for poor economic performance
By Chas Newkey-Burden Published