Thought for the day

Massive Changes Already Seen in Relative Sizes of Major Countries Expected to Continue


 
16 April 2024
 
China and India’s combined share of global GDP may approach 33% within the next decade. India is quite likely to overtake the U.S. to become the worlds second biggest country in GDP terms by 2040.

Percentage Share of Global GDP: 1990-2030
Using 5-year CAGR for projections
Massive Changes Already Seen in Relative Sizes of Major Countries Expected to Continue
* GDP in Purchasing Power Parity terms with added estimates for the size of the informal economy and adjustments for out-of-date GDP base year data.


Major changes have taken place in the relative size of the worlds biggest countries over the last three decades.

China has grown from accounting for a small percentage of global GDP, a long way behind the USA, and smaller than India and Russia, to being the worlds largest economy. Further growth is likely over the next decade taking its share of global GDP to within striking distance of a massive 22% of all global economic activity.

India’s share of the global economy is likely to reach around 11% within the next 10-15 years. Around the same time, United State’s share of global GDP will probably have shrunk from 18% in 1990, to almost the same size as India’s. And Russia’s share of global economic activity will in all probability have more than halved from 7% to only 2-3% over the same period, and have fallen even more if the current sanctions relating to Russia’s invasion of Ukraine stay in force for several years.

All these projections are based on a continuation of the country growth rate differentials seen over the past 5-years. It is of course possible if not probable that the high growth rates seen in China and India may slow down over the next decade. However it is equally possible that the growth of the USA will continue to slow down as it has over the past 30 years. Very few economists believe that the growth of Asia will slow to match that of the western world in the next decade. The growth rate differentials are likely to stay wide, so the general conclusions of this note remain valid even if they take somewhat longer to come about than postulated. See more data...



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