- Revisions to China’s GDP mean that it is now forecast to overtake the US in 2025 compared to 2028 in last year’s forecasts
- The UK appears to have overtaken France this year to become the world’s 5th largest economy (but as the 2014 GDP figures are $2,828bn for the UK and $2,827bn for France, the gap is well within the margin of error)
- The rise of India looks unstoppable. India overtakes the UK in 2018 to become the largest economy in the Commonwealth and the rise continues – by 2024 India is the world’s third largest economy
- Korea is becoming an economic powerhouse (Gangnam Style?) as its growth continues – its league table position moves from 15th in 2013 to a solid 8th, just behind Germany in 2030
- Russia’s economic woes, a likely weak rouble and a low price of oil mean that it drops back from 8th position in 2013 to 10th in 2014 and stays around that position to 2030
- Germany slides back, held back by a declining population and the likely weakness of the euro. In 2030 Germany, which for many years was the world’s third largest economy, is overtaken by the UK for the first time for since 1954 (and of course Germany then was only West Germany) to drop to 7th place in the league.
The latest edition of Cebr Global’s World Economic League Table (WELT) for 2015 reveals some interesting moves as the world’s richest powers jockey for position. Cebr Global is the international economics consultancy arm of Cebr, the economics consultancy.
The World Economic League Table tracks the size of different economies across the globe and projects changes over the next 10 years. We call the score on the current year and forecast future changes to 2030.
This year the main revisions reflect data changes – the Chinese have revised their GDP figures to measure their service sector more accurately and added an amount as large as the whole Malaysian economy. This and some other revisions mean that China now overtakes the US to become the world’s largest economy in 2025 rather than 2028 as we thought a year ago.
We also revise the oil price assumption – though not by much since last year we had already revised down our medium term forecast for the price of oil to $85. Because of greater energy efficiency and improved supply this has been revised down slightly further to $75.
And of course currencies always behave with a mind of their own which means that whatever we predict, something else will happen. Three years ago we expected a medium term value for the rouble around 36 to the dollar. Now we expect 50, with the currency having dropped to 80 last week!
The key results for 2014 are shown in Table 1.
The UK overtakes France (just) having revised our GDP figures to include earnings from drugs and prostitution. The French figures do not include these industries (which may well be larger than their British counterparts!).
Russia’s well known economic woes show it dropping to tenth place. The collapse in the Turkish Lira brings it down from 17th to 19th place. Korea moves up a place as do Italy (surprisingly but only because the Russian economy is in even worse trouble than the Italian economy!) India, the Netherlands, Belgium (who swap places with Norway) and Austria. Argentina drops 3 places as its economy collapses.
The changes to 2024 are shown in Table 2.
The fast moving emerging economies start to claim the top places – China is still second but moving into the overtaking lane to become the world’s No 1 economy. India moves into a strong 4th place. Brazil moves into 6th position, splitting Germany and the UK (this report doesn’t only revise the view of the future – the past is also revised and it now appears that our highlight of Brazil overtaking the UK in 2011, which prompted the UK newspaper The Sun to append to its report on this on its page 2 a fetching picture of a young lady on the Copacabana wearing a matching outfit to that of the lady on the opposite page, did not actually happen!).
As globalisation reaches its mature phase in 2030, the world’s league settles down to a new ordering, with China in first place and India in third. This is shown in Table 3.
This table also shows the UK overtaking Germany for the first time since 1954 (although if Scotland breaks away, we calculate that this particular ‘Il sorpasso’ will not happen until 2037). Of course, if Germany left the euro, its currency strength would mean that the UK, even if Scotland were not to leave, would be unlikely to overtake Germany until around 2050 by when the pressure of the UK’s superior demographics would prove irresistible.
Comments Cebr Chief Executive Douglas McWilliams: ‘The fun of the world economic league table is that it brings things back to hard figures. Countries like Russia and Argentina, who have invaded neighbouring countries and whose leaders spout aggressively nationalistic rhetoric are brought down to earth by their falls in the league table as their economies collapse.
‘The World Economic League table also shows the dramatic changes now taking place in the world’s economic geography with slow growing European economies falling back and Asian economies, even though their growth is slowing, catching up.
‘The only European economy that rises consistently in this league table is Sweden, where the economy was revitalised by the previous government. There may be lessons here for other European economies.’
Notes to Editors
Cebr Global’s World Economic League Table (WELT) is an annual calculation by Cebr Global, Cebr’s global economic consultancy. The base data for 2013 is taken from the IMF World Economic Outlook and the GDP forecast draws on Cebr’s Global Prospects model to forecast growth, inflation and exchange rates.
Please refer to this in copy when quoting as The Cebr Global World Economic League Table or Cebr Global’s WELT.
The Global Prospects Report is a quarterly report every three months. The report is part of the prospects service – Cebr’s macroeconomic advisory package for business.
Cebr Global is a leading independent commercial economics consultancy based in London. The report has been co-authored by the Cebr staff whose details are below plus Osman Ismail who is unavailable on Boxing Day.
For more information, please contact:
Douglas McWilliams +44 7525 287112
Charles Davis +44 7808 770372
Danae Kyriakopolou +44 7812 540030
Alasdair Cavalla +44 7845 361402