What Will the World Look Like in the Future?

The International Monetary Fund (IMF) recently released its updated projections on GDP growth over the next years. The results show that the IMF is expecting the global economy to remain stable and continue to grow pretty much in the same way it did in 2023.

Nevertheless, it is important to note that 2023 and 2024 growth rates are lower than 2022’s and this is the case for all three categories: Global Economy, Advanced Economies, Emerging Market & Developing Economies.

The global economy has certainly experienced a powerful comeback after the COVID pandemic with fewer supply chain disruptions, aggregated demand growing again and industrial production expanding. All these factors contributed to boost the global economy, which is precisely why 2022’s growth is higher than 2023’s and 2024’s.

If we look at how growth is projected to rise in each region in 2024, it is clear that the International Monetary Fund expects Emerging and Developing Asian countries, with a 4.8% expected GDP growth rate, to lead the rest of the world as economies like India, China, Malaysia, Vietnam and Indonesia will continue to expand.

The second region with the highest GDP growth rate is Africa with Sub-Saharan countries expected to hit 4% GDP growth rate in 2024 as economies like Nigeria, Ethiopia, Angola, South Africa and Kenya keep growing at a fast pace.

The 3rd region in terms of growth and with a 3.4% expected growth rate is Middle East and Central Asia where economies like United Arab Emirates, Saudi Arabia, Kazakhstan, Uzbekistan and Tajikistan are leading all others.

The 4th world region, which is projected to expand by 2.3% in 2024, is Latin America and the Carribean. The IMF expects countries like Dominican Republic, Costa Rica, Guatemala, Barbados, Dominica, St. Vincent and the Grenadines, Argentina, Colombia, Ecuador, Peru and Paraguay to lead the economic expansion in this region.

The 5th place in terms of GDP growth is occupied by the United States of America where the economy is projected to expand by 1.5% in 2024.

The 6th and last place, as far as GDP growth is concerned, is the Euro Area whose economic expansion is expected to achieve 1.2% in 2024

The International Monetary Fund’s projections highlight that in the coming 14 months emerging and developing economies will continue to grow and expand their economies while established and well-developed countries will remain fairly stable. This is a reasonably realistic scenario for 2024 but what is going to happen in the long-term future? What the world is going to look like 10, 15, 20 or 25 years from now?

Well, the correct answer to that question is probably impossible to give right now but looking at the current GDP growth projections it would be possible to extrapolate a rough estimation of which countries will see their economies expanding the most in coming years.

Having a reasonably good, statistical-based guess of what GDP growth is going to look like is particularly important for commodity markets. Economic expansion involves higher demand for raw materials and energy so GDP growth is often a synonym for increased commodity demand. Hence, knowing which country is going to experience the largest expansion is useful to understand how the flow of commodities will move, where the future demand is coming from and how this is going to re-shape the shipping industry.

Goldman Sachs, one of the largest investment banks in the world, has tried to mathematically guess which ones are going to be the future largest economies. The report, put together by the Goldman Sachs Global Investment Research team, creates 2 different future scenarios: 2050 and 2075.

The world has clearly changed quite significantly since 1980 where massive economies such as China and India were not even in the top 5. Right now China and India rank respectively at the 2nd and 5th place but this won’t last for long as the Asian superpowers are awakening and will prove particularly difficult to compete with, given the enormous size of their population. Specifically, in 2050 Goldman Sachs expects China to be the largest economy in the world (although several sources think China will surpass the USA by 2035-2038) followed by the USA while at the 3rd place we have India.

The 4th place of this ranking might surprise some but Indonesia (whose population in mid-2023 surpassed 277 million people) will be larger than Germany which is expected to be at the 5th place in 2050.

It is worth noting that other emerging countries are expected to become global powers and among these, Goldman Sachs forecasts that Brazil (whose population reached 216.5 million people in 2023) will be the 8th largest economy on the planet, Russia (whose population achieved 144.4 million people in 2023) the 10th, Mexico (whose population reached 128.4 million people in 2023) the 11th, Egypt (whose population reached 112.7 million people in 2023) the 12th, Saudi Arabia (whose population reached 37 million people in 2023 the 13th and Nigeria (whose population reached 223.8 million people in 2023) the 15th.

The reason it is important to cite what the actual population is now it is because GDP expansion is strongly correlated to population growth and several demography algorithms are based on this relationship.

Nevertheless, the ranking changes even more drastically in 2075.

In fact, Goldman Sachs forecasts that China will still be the largest economy in the world but expects India to surpass the USA while Indonesia and Nigeria will rank respectively at the 3rd and 4th place.

There is more.

Pakistan (whose population reached 241.4 million people in 2023) is expected to jump at the 6th place immediately followed by Egypt and Brazil.

It is important to point out that Pakistan is not the only new-entry in the ranking because the Philippines (whose population reached 117.3 million people in 2023) are projected to become the 14th largest economy in the world while Saudi Arabia will likely drop out of the top 15 ranking.

There are only 3 European countries that will be able, according to the projections, to remain within the top 15 in both the 2050 and 2075 forecasts: Germany, United Kingdom and France. Italy and Spain are projected to drop out of the top 15 ranking along to Australia and South Korea while Canada “disappears” only in the 2075 ranking.

Even if Germany is still in the top 5 in 2050 (with the UK at the 6th and France at the 9th place), the 2075 ranking shows there is not even one European country in the top 8 most powerful economies in the world. In fact, Germany is expected to slip at the 9th, the UK at the 10th and France at the 15th place.

There is another well-known company which published a similar study on future GDP growth and that is PricewaterhouseCooper otherwise known as PwC.

In its study called “The World in 2050”, PwC did not go as far as 2075 but its projections extend to 2030 and 2050. There is another thing which is worth mentioning, this study takes into account projected GDP at PPP (purchasing power parity). For the sake of comparison we are going to focus only on the top 15 countries (but the whole ranking will be available at the end of the present research).

PwC projects that in 2030 China will be the most powerful country in the world, economically speaking, while the USA will be the 2nd one with India, Japan and Indonesia occupying the 3rd, 4th and 5th place.

Even in this case no European country is expected to remain among the top 5 in the world, in fact, the Germany is at the 7th, the UK at the 10th, France at the 11th and Italy at the 15th place.

On the other hand, PwC expects Russia to be the 6th most powerful economy in the world, Brazil the 8th, Mexico the 9th, Türkiye the 12th while Saudi Arabia and South Korea are supposed to occupy the 13th and 14th place.

If we move to 2050, however, things are a bit different. In fact, even if China is unsurprisingly still the number 1 economy in the world, India is now number 2 with USA slipping at the 3rd place and Indonesia moving higher to the 4th place; the top 5 ranking is closed by Brazil while Japan is projected to drop to the 8th place.

In the 2050 ranking, South Korea and Italy gets replaced by Nigeria (14th place) and Egypt (15th place) while Germany and France drops respectively to the 9th and 12th place. Conversely, Türkiye advances to the 11th, Mexico jumps to the 7th while Russia and the UK are expected to remain at the 6th and 10th place respectively.

Let’s wrap things up

The ranking of the two aforementioned studies are fairly similar but the top 5 differs a bit. Both reports expects that in 2050 China, India, USA and Indonesia will be among the largest economies in the world but while Goldman Sachs believes Germany will be the 5th largest economy on the planet, the PwC’s report (which is based on PPP) ranks Brazil as the number 5 most powerful economy (in 2050 Germany is projected to drop at the 9th place for PwC).

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