The Economist Intelligence Unit (EIU) in London today released its long-term macroeconomic forecasts with key trends from now to 2050. The special report shows China becoming the world's most dominant economy followed closely by the United States and India. High birth rates in Africa and the Middle East will expand the workforce in these regions, but employment levels there likely will depend upon a global shift to sustainability.
The EIU long-term economic forecasts cover 82 economies worldwide and represent a cross section of the global economic picture. These forecasts are an important counterpart to the annual EIU Democracy Index that measures the levels of freedom around the world.
The key economic trends in the new report suggest wider social trends.
The top ten economies in 2014 at the going market exchange rates, in descending order, are the USA, China, Japan, Germany, UK, France, Brazil, Italy, India, and Russia.
Top ten economies in 2050 at the EIU's projected market exchange rates, in descending order, will be China, USA, India, Indonesia, Japan, Germany, Brazil, Mexico, UK, and France.
China will surpass the USA in gross domestic product (GDP) in 2026, forecasts the EIU. Italy and Russia will no longer rank among the top ten economies by 2050. Asia's rise will continue, but not at the same pace, by 2050 accounting for 53 percent of global GDP.
"By 2030 the top three economies of the world will be the US, China and India," says the EUI report. "Such will be the growth of the two latter countries, in particular, that by 2050 they will each be richer than the next five (Indonesia, Germany, Japan, Brazil, and the UK) put together. This will represent a scale of wealth relative to the rest of the top ten that is unique in recorded history."
The EIU report continues, "In the medium term, this will require the world's existing powers --notably the US -- to let India, and especially China, play a greater role on the world stage." International institutions will have to adapt to let China and India "exert greater influence."
A significant factor will be a decline in global birth rates, predicts the EIU. The growth rate of the global working-age population will drop to 0.3 percent in the 2015-50 period compared with an average growth rate of 1.7 percent in the 1980-2014 period.
"For countries with favourable demographics," the EIU report explains, "our forecasts assume that growth-friendly policies are pursued and are successful in providing jobs for a growing workforce and ensuring longer-term growth.
"Failure to achieve this will lead to a growing number of potential workers unable to find employment, resulting in a source of significant political instability and a missed opportunity in terms of seizing an advantage offered by favourable demographics."
In other words, if today's trends toward global thinking continue and economies shift to a more sustainable footing that respects human rights and responsibilities, the overall world economic outlook mid-century will be positive. The centers of economic powers will shift, which may upset the nationalists around the planet, but a a rising tide floats all boats.
From where I sit, the outcomes will be positive only if we adopt a global consciousness as we move forward. Spirituality (not religion) needs to inform and uplift economics and politics in the decades ahead. Such an awakening makes global sense.
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Judah Freed is the author for the forthcoming book, Making Global Sense.