According to the consulting company, South Korea’s GDP ranking will drop from 13th in 2016 to 14th in 2030, and 18th by 2050. (image: KobizMedia/ Korea Bizwire)
SEOUL, Feb. 8 (Korea Bizwire) – South Korea’s economic outlook looks rather disappointing, at least from a PwC projection in its latest report, The Long View (How will the global economic order change by 2050?).
According to the consulting company, South Korea’s GDP ranking will drop from 13th in 2016 to 14th in 2030, and 18th by 2050, falling behind emerging countries like Nigeria (which will improve from 22nd to 14th), Egypt (21st to 15th), and Pakistan (24th to 16th).
The Philippines and Vietnam will have caught up with Asia’s fourth-largest economy, ranking 19th and 20th respectively, it predicted.
Overall, PwC believes the world economy will double in size between now and 2050, assuming that recent protectionist movements fall out of favor and no humanity-threatening catastrophes occur.
China, which currently leads in terms of GDP, will maintain its position in 2050. But the report projected India to make progress to claim second spot, with the U.S. slipping to third, followed by Indonesia (from 8th in 2016), Brazil (from 7th), Russia (maintain 6th), and Mexico (from 11th). Japan and Germany, ranking 4th and 5th in 2016, will tumble down to 8th and 9th.
The E7 – or the seven emerging market economies of Brazil, China, India, Indonesia, Mexico, Russia and Turkey – will spearhead global economic development with average annual growth of 3.5 percent, higher than the 2.5-percent global average, while Vietnam, India, and Bangladesh will make the fastest progress over the period with a 5-percent growth rate.
“The E7 could comprise almost 50 percent of world GDP by 2050, while the G7′s share declines to only just over 20 percent,” said PwC Chief Economist John Hawksworth.
Nonetheless, the report emphasized that the projected growth in emerging markets will only be possible if governments make efforts to improve macroeconomic stability, lessen economic reliance on natural resources, and with sustained investment in education, infrastructure, and technology.
For instance, for Nigeria, it said that the African country must “diversify its economy away from oil and strengthen its institutions and infrastructure” to realize its full projected potential.
Meanwhile, although noting that fast growing populations in emerging economies will help boost domestic demand and the size of the workforce, and therefore growth in GDP, “it can also make it more challenging to boost average income levels.”
By Kevin Lee (kevinlee@koreabizwire.com)
