Fast-growing Asian nations are poised to power the global economy to more than double its size in the next 15 years, according to the latest Centre for Economics and Business Research forecast.
The world’s gross domestic product will reach $221 trillion by 2039, up from $100 trillion currently, with the bulk of growth reflecting a catch-up by less developed nations, according to analysis by the CEBR.
Asian economies also dominate the fastest risers in CEBR’s World Economic League Table, in particular India, which is on track to solidify its position as a global economic powerhouse, the London-based centre said.
India is forecast to replace Japan as the world’s fourth-largest economy and cross the $5 trillion milestone in 2025, and by 2029, overtake Germany as the world’s third-largest economy. By 2039, it is projected to be $12.8 trillion economy.
“India continues its ascent”, which “is driven by its growing middle class, structural reforms, and targeted investments in infrastructure and green energy”, said Pushpin Singh, senior economist at CEBR.
“While short-term pressures like inflation and slowing consumption pose challenges, India’s long-term outlook remains robust, underscoring its role as a key driver of global growth,” he said.
Other nations expected to experience rapid growth include Indonesia, the world’s fourth most populous country. It has been the world's 16th largest economy since 2016 but is forecast to move into the top 10 by 2039.
Bangladesh, driven by its growing middle class and robust development, is expected to surge 16 places from 37th to 21st, the Philippines is set to rise ten places from 33rd to 23rd, and Vietnam is poised to jump by nine places to number 25 on the list.
But one Asian economy that will not be rising up the table is China and CEBR says it will not overtake the US as the world’s largest economy within 15 years, as had been predicted.
“China’s economy is grappling with significant challenges, including a slowdown in domestic activity, persistent deflationary pressure and the weight of demographic shifts,” said Sam Miley, CEBR’s managing economist and forecasting chief.
The world’s second-biggest economy has been struggling on the back of a property crisis and weak domestic demand.
The World Bank on Thursday lifted its growth forecast for China’s economy, with GDP estimated to grow 4.9 per cent in 2024 and 4.5 per cent next year, but cautioned that "subdued household and business confidence, along with headwinds in the property sector will continue weighing on growth" in 2025.
"Recent signals of forthcoming fiscal stimulus offer some optimism, but the lack of clarity surrounding these measures leaves uncertainty over their potential to counter the mainland’s economic slowdown," said Mr Miley.
“In light of these headwinds, we no longer anticipate China overtaking the US as the world’s largest economy in GDP terms over our forecast horizon.”
