Given its economic strength, and significantly larger population, it is hard to imagine the UK’s economy overtaking Germany’s any time soon. But, that’s exactly what one respected independent think-tank believes will happen by the end of the 2030.
According to the Centre for Economics and Business Research (CEBR), China will emerge as the world’s leading economy (by GDP) in 2028, and the UK will do ‘second best’ out of all the world’s advanced economies over the next decade and a half to become the leading Western European economy by 2030.
The CEBR released its annual World Ecomomic League Table last week, which predicts how the world’s most successful nations will be placed in 5, 10 and 15 years time.
The report identifies several key factors which will contribute to the UK’s future growth; continuing immigration and its effect on the country’s demographics, lower exposure to future Eurozone problems than many other European economies, and relatively low taxes compared to our neighbours (which should help stimulate growth).
By contrast, Germany’s ecomomic growth is likely to be hindered by an ageing population, and the falling value of the Euro.
There may be some impediments in the way too – the UK may need to ‘reorient its exports to the faster growing markets’, avoid any potential breakup with other UK regions (the Scottish independence referendum takes place this September), and maintain a healthy relationship with the rest of the EU. Should these factors all work in the UK’s favour, the CEBR predicts that our economy should overtake France’s within four years, and gain parity with the Germany economy within fourteen (by 2028).
In the meantime, other world regions are predicted to grow at a much faster pace than the US, Japan and Europe over the next 15 years.
The US economy has outperformed CEBR forecasts in recent years, so the Chinese economy is expected to surpass it in 2028, rather than the previous prediction of 2022. By this date, India is expected to leapfrog Japan to become the world’s third largest economy.
Unsurprisingly, the world economic rankings may change significantly over the next two decades. Even by 2028, the Indian economy will still only by one-fifth the size of the USA’s.
Here is the current Top 10 table, and the predicted rankings for 2028 (we’re rounded the GDP figures up to one decimal place).
The 2013 Top 10 (GDP)
1. USA ($16.7)
2. China (8.9)
3. Japan (5)
4. Germany (3.6)
5. France (2.7)
6. UK (2.6)
7. Brazil (2.2)
8. Russia (2.1)
9. Italy (2.1)
10. Canada (1.8)
The 2028 Top 10
1. China ($33.5)
2. USA (32.2)
3. India (6.6)
4. Japan (6.4)
5. Brazil (5.1)
6. Germany (4.4)
7. UK (4.3)
8. Russian (4.1)
9. Mexico (3.7)
10. Canada (3.7)
You can download a copy of the full report (you will need to provide brief registration details) here.