UK forecast to become world’s fourth largest economy
The UK is set to overtake Germany and Japan to become world’s fourth largest economy in the 2030s, according to a new report by think tank Centre for Economics and Business Research (CEBR).
The report said that the UK is forecast to be “the best performing economy in Western Europe and after overtaking France in 2014 is likely to overtake Germany and Japan during the 2030s.”
The UK’s rank as the fourth largest economy is expected to only last a short time though, with Brazil eventually overtaking.
CERB said that the UK’s strength is its cultural diversity and strong position in software and IT applications.
However, it pointed out the country’s “bad export position” and “unbalanced economy”, with many areas of the country “heavily dependent on subsidies from the relatively high taxes levied on Londoners.” In addition, the UK also “runs the risk of breakup, with Scotland and possibly Northern Ireland seceding,” which would generate slower growth.
The UK is currently fifth in the table with a gross domestic product of £2 trillion.
Chinese economy expected to overtake the US four years later than previously forecast
The report said that slower GDP growth in China and a weaker currency mean that the country is now forecast to overtake the US in 2029 compared with 2025 in last year’s forecasts.
France and Italy face exclusion of the G-8
CEBR said that weaker EU economies, such as France and Italy, are “slipping way down the table” and “face exclusion from bodies like the G-8 and possibly eventually the G-20 as their economies persistently underperform.”
Cebr Acting Managing Economist Danae Kyriakopolou who heads Cebr’s global research said: “The World Economic League Table keeps track of which economies are rising and which ones are falling.
“China’s slower than expected growth and risks around the sustainability of its debt are reflected in a delay in the date when it is expected to overtake the US as the world’s largest economy from 2025 to 2029.
“Europe’s economic weakness is likely to be reflected in France, Italy and Russia being dropped from the world’s G-8 Economic Club.
“The world’s fastest growing region is forecast to be Central Asia. This is driven by fundamentals and is likely to be reinforced by China’s One Belt One Road proposals.”