Global (common wealth) _ According to a recent Goldman Sachs analysis, the global economic power balance is expected to shift substantially in the coming decades. We’ve constructed a bump chart in the graphic above to present a historical and predictive overview of the world’s top 15 economies at many points in time: 1980, 2000, 2022, and Goldman Sachs projections for 2050 and 2075. All values represent real GDP predictions in 2021 dollars.
The enormous expansion of China and India has been a key issue over the last several decades. For example, from 2000 and 2022, India advanced eight places to become the world’s fifth largest economy, surpassing UK and France.
Goldman Sachs estimates that by 2050, Asia will have a greater share of global GDP. While this is owing in part to Asia beating previous projections, it is also due to the BRICS countries underperforming. Notably, Indonesia will overtake Brazil and Russia to become the world’s fourth largest economy by 2050. Indonesia is the world’s largest archipelagic state, with a population of 277 million people.
The underlying numbers for 2075 are shown in the table below. Again, the values indicate real GDP predictions in 2021 USD. Extending the projection to 2075 reveals a significantly different world order, with Nigeria, Pakistan, and Egypt breaking into the top ten. Rapid population increase, which should result in a vast work force across all three countries, is a crucial factor in these projections.
Meanwhile, Europe’s economy will fall lower down the rankings. Germany, previously the world’s third largest economy, will now rank ninth, after only Brazil. It should also be noted that by this time, China, India, and the United States are predicted to have similar GDPs, implying roughly equal economic strength. As a result, how these countries choose to interact with one another is likely to affect the global environment in far-reaching ways.
Gross domestic product (GDP) is an estimate of the total value of completed products and services produced inside a country’s borders over a given time period, often a year. GDP is a prominent measure of a country’s economy and its impact on the global economy.
The expenditure approach is most generally used to compute GDP, which adds together spending on new consumer items, new investment expenditures, government spending, and the value of net exports (exports minus imports).
Most countries’ GDPs fluctuate with the phases of different economic cycles, against a backdrop of longer-term economic growth over time; however, it’s interesting to note that, despite these ups and downs, the top economies as measured by GDP don’t budge easily from their positions.
In comparison to the top 25 economies in 2000, our analysis found that just two countries—Thailand and Japan—were in the top 25. In comparison to the top 25 economies in 2000, our analysis indicated that only two countries—Thailand and Indonesia—were not previously in the top 25. Having said that, there have been some significant movers on the list.1
China was ranked 13th in 2000 and has been ranked second since 2010. Further down the list, Indonesia, one of the two aforementioned additions to the list, jumped from 27th to 16th largest economy in 2000, while Thailand jumped from 32nd to 24th. Saudi Arabia rose from 20th to 18th in 2021, while Switzerland slipped from 18th to 20th.
The most recent annual data available for these countries is from 2021, and it reveals that countries began to recover from the COVID-19 epidemic, which had a significant impact on economies worldwide. Because of Covid’s impact on energy prices, tourism, trade volumes, and retail closures due to quarantines, countries witnessed record-breaking GDP reductions in 2020.
The vast majority of the top 25 countries saw negative GDP growth in 2020, while 2021 GDP figures suggest a comeback from 2020.
