India is on track to overtake Germany as the world’s fourth-largest economy by 2026, dumping all leading European economies out of the top flight as Asia continues its remarkable rise.
The forecast from the Centre for Economic and Business Research in its World Economic League table 2020 underscores the change in the world’s power dynamics this millennium.
In 2004 Germany, Britain and France were the third, fourth and fifth largest economies respectively after the United States and Japan. Since then, China has raced into second place behind the US and India has overtaken Britain and France.
By 2026 the US will be the lone western power holding back a resurgent Asia as it reasserts its past dominance, the centre predicts. Until the industrial revolution in the early 1800s, India and China had been the world’s biggest economies for almost two millennia.
The centre’s league table, which has been running for 11 years, tracks the size of economies worldwide and projects changes over the next 15 years. It used the International Monetary Fund’s 2019 data to build its projections.
China will not overtake the US to be the world’s largest economy until 2033, three years later than previously forecast, the centre said.
The US strengthened its grip on the top spot this year, accounting for 24.8 per cent of world GDP, its largest share since 2007. Chinese growth will slow “as a result of demographics and greater concentration on quality of life”.
Despite Europe’s decline and the distractions of Brexit, the UK held up better than expected and is forecast to show France a clean pair of heels in the coming decade. The British and French economies are almost the same size and have jostled for the fifth spot in recent years but, in spite of Brexit, “the French economy failed to overtake the UK economy in the 2016-19 period”.
“We now expect that by 2034 the UK economy will be a quarter larger than the French economy,” the centre said. Germany will still be Europe’s biggest economy, at fifth in the league table and one place ahead of Britain.
Overall, the league table showed the world economy’s centre of gravity moving east “as these countries cash in on their demographic dividends”. The Philippines and Bangladesh will be the fastest-rising economies in the region, both climbing into the top 25.