China will overtake the USA to become the world’s biggest economy in 2028, five years earlier than previously estimated,” said the UK-based Centre for Economics and Business Research in its annual report published on 26th December 2020.
The report attributes China’s growing economic muscle to its skillful management of the pandemic, with its strict early lockdown, improving its performance relative to the USA and Europe.
“The COVID-19 pandemic and corresponding economic fallout have certainly tipped this rivalry in China’s favour,” said the report.
China’s economy is projected to record an average growth of 5.7% in 2020 before slowing down to 4.5% a year from 2026-30.
The consultancy firm also said that India’s economy would overtake UK’s in size in 2021.
India’s ascent on the ladder will also see other Asian powerhouses increasingly dominate the top 10 largest economies over the next 15 years. India looks set to leapfrog Britain and France in 2021 to become the world’s fifth-largest economy in dollar terms, this report shows.
The Centre for Economics and Business Research (Cebr) said that India’s economy has still caught up with that of France and the UK despite temporary setbacks. India’s growth had been slowed by restrictions on high-value banknotes and a new sales tax – a view shared by economists polled by Reuters.
While President Donald Trump has inflicted damage on world trade due to his fights with China, the impact is less severe than anticipated, ensuring that the USA will still retain its pole position for the next 7 years. While the United States is likely to have a robust post-pandemic rebound in 2021, its growth would slow to 1.9% a year between 2022 and 2024 and then to 1.6% after that.
While Brexit has affected the UK, it is set to overtake France in 2020.
Russia is vulnerable to low oil prices and too reliant on the energy sector and looks likely to fall to 17th place among the world’s largest economies by 2032, from 11th now.
In dollar terms, Japan would remain the world’s third-biggest economy until the early 2030s, when it would be overtaken by India, pushing Germany down from fourth to fifth.
The UK, currently the fifth-biggest economy, is expected to sixth place from 2024.
However, despite a hit in 2021 from its exit from the European Union’s single market, UK GDP in dollars is forecast to be 23% higher than France’s by 2035, helped by Britain’s lead in the increasingly crucial digital economy.
ALSO READ: China’s Economy Rebound in Q3 Despite Resurgence of Pandemic
