Today’s emerging markets are tomorrow’s powerhouses. According to a recent forecast from Standard Chartered, countries like Indonesia, Brazil, Turkey and Egypt, thoses countries will all be moving up the economic ladder over the next few years but before we get into future growth let’s look at where things stand today. China recently edged out the United States to become the world’s largest economy by GDP when adjusted for purchasing power parity (PPP). India, Japan and Germany will round out the top five.
In 2030 China’s GDP will continue growing, even accounting for a natural slowdown given the economy size. the country may still end up with an economy twice the size of the United State’s. Already five of the ten largest companies in the world are located in China. In the other side, India will shift up into second position. Some of this growth will be fueled by rapid urbanization as many of the world’s fastest growing cities are located in India. Indonesia’s economy is expected to triple, surpassing the size of India’s today. the country’s capital Jakarta is projected to become the world’s biggest mega city by 2030.
With three countries in the top five Asia’s slice of the global GDP pie will increase to 35%. Egypt was expected to rock it up the rankings from 21st place to seventh by 2030. the country’s rapidly increasing population will play a big part in this economic growth. Germany is expected to remain in the top 10 but at the bottom of the list while the country is likely to remain the dominant economy in Western Europe it’s modest growth rate will see it fall behind more populous rapidly developing countries in Asia. this is a trend that will likely play out across the world, as the divide between the developed and the developing economies continues to close theoretically.
A country’s share of global GDP should eventually converge on their share of global population. A trend we see reflected in this forecast by 2037 of the world’s 10 largest economies will be located in today’s emerging markets as the shift occurs Western economies may need to adjust to new realities on the global economic stage.
