THE UK economy will no longer be one of the top 10 largest economies in the world by 2050, a city consultancy has said today.
PwC tips Mexico to be one of the 10 biggest economies in the world by 2030 and Nigeria to enter the top 10 by 2050. By that time, the UK is forecast to have dropped out of the top 10 altogether. It is currently 10th, according to PwC’s figures.
The company also believes Turkey, Nigeria, Vietnam, Colombia, Poland and Malaysia could be the fast-growing large economies over the period to the middle of the century.
PwC issued a disclaimer, however, saying that these countries’ governments needed to pursue sensible economic policies in order to benefit from their potential growth.
“Recent experience has re-emphasised that relatively rapid growth is not guaranteed for emerging economies, as indicated by recent problems in Russia and Brazil,” the report said.
John Hawksworth, PwC’s chief economist, said: “Europe needs to up its game if it’s not to be left behind by this historic shift of global economic power, which is moving us back to the kind of Asian-led world economy last seen before the Industrial Revolution. The US may hold up better, provided it can remain at the global technological frontier, and the UK could also perform well by G7 standards if it remains open to trade, investment, people and ideas.”
The GDP of different countries is measured in different currencies. PwC accounts for this using purchasing power parity (PPP) rates – which account for price differences between countries – as opposed to market exchange rates (MER).
While economists remain divided on which is the best measure, PwC notes “historical evidence shows that MERs will generally, in the long run, tend to move up towards PPPs for emerging economies as their average income levels gradually narrow the gap with the current advanced economies”.