Global growth, though at a declining rate, will be sustained by emerging markets between now and 2060 when the global economy will grow at around 3% per year on average, an OECD report released on Friday showed.
“The balance of economic power is expected to shift dramatically over the next half century, with fast-growing emerging-market economies accounting for an ever-increasing share of global output,” the OECD said in a statement accompanying the report.
China’s economy is projected to surpass the euro area this year – the data was calculated on the basis of 2005 purchasing power parities (PPP) – and the US in a few more years, to become the largest economy in the world.
The report – which calculated global GDP as the sum of GDP for 34 OECD and 8 non-OECD G20 countries – also showed India surpassing Japan soon and leaving the eurozone behind in around 20 years. (Click here for the OECD's interactive chart)
The combined GDP of China and India, which currently amounts to only one-third of that of the OECD area, will be larger than that of the entire bloc in 2060, it predicted.
The OECD-wide GDP growth rate is projected at around 2% annually, with many countries seeing declining growth rates, but because relatively fast-growing emerging markets will gradually take a larger share of global output, global growth will remain “fairly stable” between now and 2060, according to the report.
Growth in non-OECD countries will decline to around 5% in the 2020s from over 7% in the past decade and it will be about 2.5% by the 2050s, the report projected. China will have the highest growth rate until 2020 but it will then be surpassed by India and Indonesia, partly because of a faster decline in China’s working-age population.
GDP per capita will also tend to converge across countries but there will still be “significant gaps” in living standards between advanced and emerging economies, the report said.
By 2060, GDP per capita of the currently poorest economies will more than quadruple (in 2005 PPP terms) while it will only double in the richest economies. China and India, it said, will see a more than seven-fold increase in income per capita by 2060.