In the latest update of its The World in 2050 series of reports, the professional services provider predicted that the UK will have dropped to 11th place in the ranking of the world’s largest economies by 2050.
The research argued that the financial crisis and its immediate aftermath has affected the G7 group of developed nations much harder than the major emerging market economies, or the E7. This has accelerated the shift of the economic centre of gravity towards countries such as China and India.
China, the US and India are tipped to be the three biggest economies “by far” in 2050, while Brazil could overtake Japan to become the fourth largest. PwC added that China could pass the US as the world’s largest economy by as early as 2017 on a purchasing power parity basis.
The UK, on the other hand, is likely to drop behind Mexico and Indonesia in the years to 2050. However, UK businesses could benefit from rising demand created by emerging markets – especially in sectors such as the creative industries, business and financial services, university education and healthcare.
John Hawksworth, chief economist at PwC, said: “The shift in the global economic centre of gravity is clear; but there are still major challenges for the emerging economies to sustain their recent strong growth.
“At the same time, there are huge opportunities for Western companies in the emerging markets – but also great competitive challenges from fast-growing emerging market companies.”
