An open and immigrant-friendly UK can stay in the top 10 as the world economy doubles in size by 2050 says a new report
The world economy is set to double in size by 2050, with the UK hanging on to a spot in the top 10 if it can forge successful new trading links and an open attitude to immigration after Brexit, according to a new report.
The UK will fall one place in terms of purchasing power parity, says PwC. However, the report’s authors stress the UK will not achieve this if big limits on immigration shut off British access to talent from around the world.
John Hawksworth, chief economist at PwC, said: “It’s not just about trade and investment; it’s about being open to talented people.”
Read more: The UK is facing a "workforce crisis" if immigration levels fall
“One of the worst things the UK could do would be to pull up the drawbridge,” he added.
| GDP PPP | 2016 rankings | 2030 rankings | 2050 rankings | |||
| Country | GDP at PPP | Country | Projected GDP at PPP | Country | Projected GDP at PPP | |
| 1 | China | 21269 | China | 38008 | China | 58499 |
| 2 | United States | 18562 | United States | 23475 | India | 44128 |
| 3 | India | 8721 | India | 19511 | United States | 34102 |
| 4 | Japan | 4932 | Japan | 5606 | Indonesia | 10502 |
| 5 | Germany | 3979 | Indonesia | 5424 | Brazil | 7540 |
| 6 | Russia | 3745 | Russia | 4736 | Russia | 7131 |
| 7 | Brazil | 3135 | Germany | 4707 | Mexico | 6863 |
| 8 | Indonesia | 3028 | Brazil | 4439 | Japan | 6779 |
| 9 | United Kingdom | 2788 | Mexico | 3661 | Germany | 6138 |
| 10 | France | 2737 | United Kingdom | 3638 | United Kingdom | 5369 |
All figures at purchasing power parity in billions of US dollars (constant 2016 values). Source: PwC
Restrictions on immigration were a central part of the Leave campaign, but too tight restrictions could harm growth, according to some economists. The National Institute of Economic and Social Research (Niesr) estimates stricter controls on immigration could leave the UK up to 1.6 per cent poorer by 2020.
The report also finds that China is the largest economy at purchasing power parity, which takes into account the much lower cost of living. The US still has the world’s largest GDP by $7 trillion, according to the World Bank.
The difference in the cost of living also means India will overtake the US by the middle of the century, according to the measure. Meanwhile Indonesia, which reported a GDP growth rate of 5.02 per cent in 2016, will rise to fourth in the ranking.
Vietnam, the Philippines and Nigeria are predicted to make the biggest moves up the ranking, provided they can sustain a rapid pace of development.
The prospects for UK growth will depend on a favourable trade deal with the EU, which is still the UK’s biggest trading partner, as well as a pivot to faster-growing developing economies.
UK growth will be supported by “favourable demographic factors and a relatively flexible economy,” according to Hawksworth.
China and India, both of which are set to be bigger than the US in purchasing power parity terms, will be “increasingly important” for UK trade. Meanwhile the 500m consumers of the Association of Southeast Asian Nations (Asean) will represent a powerful draw for business.