A research report of growth projections for 2050, published on Tuesday, February 14 by the Centre for Future Studies and International Information (CEPII) announced that China could amount 33% of the world’s economy in the middle of the century , almost as much as the European Union (12%), the United States (9%), India (8%) and Japan (5%) combined.
At constant prices of 2005, the Chinese and Indian economies are each increased eightfold from 2008 to 2050, while the American and European would increase only by 80% to 90%.
“We have avoided extrapolating current growth rate, says Agnes Benassy-Quere, Director of the CEPII. For example, for China, a growth rate of 8% would be multiplied by 21 times of its economy. We have proposed a scenario for 147 countries based on capital, labor and energy, coupled with demographics, and take two forms of technological progress into account. Remember that these are not exact forecasts, but academic projections “.
China’s growth will shift over the period 2008-2025 from 7.2% to 4.3%, because its population will decline rapidly, its enormous savings rate and investments will also become less efficient. Its trade surplus could disappear by 2030.
The United States, which would lose the position as the world’s first economy around 2020, would experience poor growth of 1.6% on average, far from its historical trend, and barely higher than the Europe (+1.5%).
These projections contain a surprise and a confirmation. The surprise, “it’s very average performance of Brazil grow by 3.3% from 2008 to 2025 and 2.6% from 2025 to 2050,” says director of CEPII.
The confirmation: the workforce is the parameter which overwrites the others, and the sub-Saharan Africa will be greatly benefited by rapid population growth, so that from 2040, it will be the most dynamic region in the world with an average growth of 5% per year. ”
The disadvantages of this kind of projections are obvious. Indeed, it doesn’t take technological innovations comparable to internet or mobile phone into account, or miss the exploitation of discoveries such as giant offshore oil fields.
Finally, these projections can be disrupted by profound social changes. Thus, the CEPII has notably adjusted upwards the projected growth of India (6.4% and 5.1%) and Morocco (4.4% and 4%), by integrating into its calculations assuming an increasing level of education of women, then a lower number of children and, consequently, a higher female employment rate which will cause an increased enrichment. But the pace of this change may be hampered by cultural, religious or budget, and remains a major unknown.