The next 50 years will be marked by a dramatic shift in the balance of economic power — in which the developing world, especially China and India, will surpass the west in terms of economic power in the next 50 years, according to a recent report from the OECD.
“Looking to 2060: Long-term growth prospects for the world” offers some fascinating predictions for economic growth. Just take a look at these charts:
Here is how world GDP broke down last year (these are the OECD countries):
And here is the OECD’s projection for 2030:
The projections for the developing world and the world as a whole (global GDP could grow at about three per cent annually until 2060, according to the report) are optimistic — but they pail in comparison to the mind boggling predictions for China and India.
“On the basis of 2005 purchasing power parities (PPPs),” the report notes,” China is projected to surpass the Euro Area in a year or so and the United States in a few more years, to become the largest economy in the world, and India is projected to surpass Japan in the next year or two and the Euro area in about 20 years.” By 2060, China and India will have experienced a seven-fold increase in income per capita and “the combined GDP of these two countries will be larger than that of the entire OECD area” (based on current membership).
The one trend that seems to work against the developing world is that the OECD expects the GDP growth rate of developing countries to continue to outpace that of OECD countries, but the gap between the two will shrink significantly.
But that’s not necessarily a sign of a slow down; the growth rates were so disparate mainly due to the fact that non-OECD countries are rapidly developing and modernizing, whereas OECD countries are mostly already developed. As developing countries catch up, they will not necessarily expand as fast.
Here is the video that accompanies the report:
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