Actinoid Group Industry Updates

What will the world look like in 2050?

Emerging market economies will fuel global economic development, steadily increasing their proportion of global GDP over time. The global economy is expected to double in size by 2042, rising at a 2.6 percent annual average pace between 2016 and 2050. We expect emerging market and developing countries to drive this growth, with the E7 economies of Brazil, China, India, Indonesia, Mexico, Russia, and Turkey growing at an annual average rate of nearly 3.5 percent over the next 34 years, compared to just 1.6 percent for the advanced G7 nations of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

The global economy may more than double in size by 2050 as a result of continuous technological-driven productivity advances, far exceeding population growth. Emerging markets may develop nearly twice as rapidly as established economies on average. As a result, six of the world's seven largest economies, led by China (first), India (second), and Indonesia, are predicted to be emerging economies by 2050. (4th)

The United States might fall to third place in the global GDP rankings, while the EU27's share of world GDP could fall below 10% by 2050. By 2050, the United Kingdom may slide to tenth place, France out of the top 10, and Italy out of the top twenty, as they are eclipsed by faster expanding emerging economies such as Mexico, Turkey, and Vietnam, respectively. However, if emerging economies are to realise their long-term economic potential, their institutions and infrastructure must be significantly improved.

By 2020, China will have risen to prominence as a major global power, with its one-party government and state-dominated economy prompting anxiety in other capitals—and pride in Beijing. According to Bloomberg Economics, China will have surpassed the United States to become the world's largest economy and, possibly, its most powerful political actor by 2035. China's rise is merely one component of a larger change that is already happening and will likely accelerate in the coming decades.

The United Kingdom might fall to tenth position by 2050, France out of the top ten, and Italy out of the top twenty as they are surpassed by faster expanding emerging economies such as Mexico, Turkey, and Vietnam, respectively.

We used a growth accounting framework—adding up labour, capital, and productivity contributions—to forecast potential GDP for 39 countries ranging from the United States to Ghana through 2050. We used that data to map some of the significant geographic and political trends that would have an impact on the global economy. According to the findings, a magnificent era of stability that lasted from the conclusion of World War II to the early twenty-first century is coming to an end. The economic centre of gravity is shifting from west to east, from developed economies to developing markets, from free markets to state control, and from established democracies to authoritarian and populist governments.

A lot of things might go wrong and send our forecasts off course. The Covid-19 problem exemplifies how pandemics may redraw the global economic map. Wars, natural calamities, and financial meltdowns may all have the same effect. Policy decisions on globalisation and climate change might have the same effect. Nonetheless, in the absence of a crystal ball, predictions of prospective growth provide the most solid foundation for long-term planning.

Asia is reclaiming its place at the heart of the global economy. As shown in the graph above, Asia accounted for only 25% of global output before the turn of the century, far less than North America and Europe. China had yet to join the World Trade Organization, while India's potential was buried beneath the License Raj. By 2050, Africa, which now houses more than half of the world's population, will also account for more than half of the continent's economic production. North America and Europe will lose ground.

The emerging-market proportion of global GDP is also increasing, owing primarily to the expansion of China and India. Emerging markets accounted for almost one-fifth of world production in 2000. They are on track to overtake advanced nations as the largest contributors to global GDP in 2042, and by 2050, they will account for about 60% of the total. According to our forecasts, India will overcome an ageing Japan to become the world's third largest economy in 2033. China will overtake the United States as the world's largest economy by 2035. Indonesia might be in the big leagues by 2050. Asian developing markets will account for three of the world's largest economies.

Since the Reagan and Thatcher revolutions, the free-market concept has served as the organising principle for the global economy for the past four decades. The balance between the market and the state is expected to shift during the next thirty years. Economies with a high degree of government ownership and control are gaining ground.

According to Bloomberg Economics' GDP predictions and the Heritage Foundation's categorization scheme, the percentage of global production generated by "free" or "largely free" economies is expected to fall from 57 percent in 2000 to 33 percent in 2050. The percentage of "largely unfree" economies—those with a significant degree of state ownership and control—is expected to climb from 12% to 43%.