The emerging economy of Pakistan could surpass the Canadian economy by 2050, according to an economic forecast by management consultancy PricewaterhouseCoopers (PWC).
A report of the PWC says, “By 2050, emerging economies Mexico and Indonesia are likely to be larger than the UK and France, while Pakistan and Egypt could overtake Italy and Canada,”.
The findings — based on gross domestic product purchasing power parity (PPP) terms — also forecasts China and India will overtake the United States as the world’s first and second largest economies by 2050. The United States will go down to third largest economy in the world.
Canada is currently ranked as the 17th largest economy, but by 2030 the country will slip to No. 18 and by 2050 to No. 22. Pakistan will move to No. 16 place and Egypt on 15.
The PWC forecast seems incredulous as Egypt’s GDP based on the more common market exchange rates (MER) stood at US$340 billion and Pakistan a mere US$284 billion in 2016.
The consultancy notes that “it might seem brave to opine on economic prospects for 2017, let alone 2050,” after a year of major political shocks with the Brexit vote and the election of President Donald Trump.
“However, I still think it is important to take a longer term view of global economic prospects that looks beyond the short-term ups and downs of the economic and political cycle, which are indeed very difficult to forecast,” wrote John Hawksworth, chief economist, PWC UK in the report.
Instead, the consultancy focused on fundamental drivers of growth, such as demographics and productivity, which in turn is driven by technological progress and diffused through international trade and investment, Hawksworth said.
Japan would lose its fourth spot to Indonesia by 2050, according to PWC. Germany, United Kingdom and France will also make way for rising economic powers Brazil, Russia, and Mexico to be among the Top 10 largest economies.
PWC warns that while emerging countries may benefit from strong population growth, their progress will depend on being able to generate enough jobs for young people in their countries.
The seven most advanced nations — so-called G7, comprising Canada, the U.S., Japan, Germany, the United Kingdom, France and Italy — will see their share of world’s GDP shrink to about 20 per cent in 2050 from 30 per cent currently.
PWC projects the global economy to double by 2050, growing at annual growth rate of 2.6 per cent, largely fuelled by population growth and infrastructure needs of emerging economies.
“We expect this growth to be driven largely by emerging market and developing countries, with the E7 economies of Brazil, China, India, Indonesia, Mexico, Russia and Turkey growing at an annual average rate of almost 3.5% over the next 34 years, compared to just 1.6% for the advanced G7 nations of Canada, France, Germany, Italy, Japan, the UK and the US,” PWC said.