A think-tank said China is expected to overtake the United States as the world’s largest economy five years earlier than earlier projections.
A think-tank said that China will overtake the United States to become the largest economy in the world in 2028, five years earlier than previously expected due to the two countries’ divergent recoveries from the Covid-19 pandemic.
“For some time, the main topic of the global economy has been economic conflict and soft power between the United States and China,” the Center for Economics and Business Research said in an annual report published on Saturday.
“The COVID-19 pandemic and the corresponding economic repercussions have definitely upended this rivalry in China’s favor.”
CEBR said that “China’s skilled management of the epidemic”, with its early strict lockdown, and long-term growth strikes in the West mean an improvement in China’s relative economic performance.
China appeared to be poised for an average economic growth of 5.7% per year from 2021-2025 before slowing down to 4.5% per year from 2026-30.
While the United States was likely to experience a strong post-pandemic recovery in 2021, its growth will slow to 1.9 percent annually between 2022 and 2024, and then to 1.6 percent thereafter.
Japan will remain the world’s third-largest economy, by dollar value, until the early 2000s when it is overtaken by India, pushing Germany down from fourth to fifth place.
The United Kingdom, which is currently the fifth largest economy according to CEBR, will decline to sixth place from 2024.
However, despite its 2021 blow to its exit from the European Union’s single market, Britain’s GDP (in dollars) was expected to be 23 percent higher than France by 2035, supported by the UK’s leadership in the digital economy. Of increasing importance.
The European Statistics Center said Europe accounted for 19 percent of output in the world’s 10 largest economies in 2020, but that would drop to 12 percent by 2035 or less if there was a sharp split between the European Union and the United Kingdom.
She also said that the impact of the epidemic on the global economy is more likely to be seen in higher inflation rather than slowing growth.
“We see an economic cycle with higher interest rates in the mid-2020s,” she said, challenging governments that have borrowed heavily to fund their response to the COVID-19 crisis.
“But the fundamental trends that have been accelerated by this time point to a greener and more technology-dependent world as we move into 2030.”