China is expected to overtake the United States as the world’s largest economy five years ahead of previous forecasts, a study group said.
China will overtake the United States to become the largest economy in the world in 2028, five years earlier than previously estimated due to contrasting recoveries from the two countries of the pandemic COVID-19, a study group said.
“For some time, a comprehensive theme of the global economy has been the struggle for economic and soft power between the United States and China,” said the Center for Economic and Business Research in an annual report published on Saturday.
“The COVID-19 pandemic and the corresponding economic consequences have certainly put this rivalry in favor of China.”
CEBR said that China’s “skillful pandemic management”, with its early and strict blockade, and the impacts on long-term growth in the West mean that China’s relative economic performance has improved.
China appeared to have an average economic growth of 5.7% per year in 2021-25, before decelerating to 4.5% per year in 2026-30.
Although the United States was likely to have a strong post-pandemic recovery in 2021, its growth would slow to 1.9% per year between 2022 and 2024, and to 1.6% thereafter.
Japan would remain the third largest economy in the world, in terms of dollars, until the beginning of 2030, when it would be overtaken by India, pushing Germany from the fourth to the fifth.
The United Kingdom, currently the fifth largest economy under the CEBR measure, would fall to sixth place from 2024.
However, despite the success in 2021 with its exit from the European Union’s single market, the British Gross Domestic Product (GDP) in dollars was projected to be 23 percent higher than that of France in 2035, aided by the UK’s leadership. in the increasingly important digital economy.
Europe accounted for 19 percent of production in the 10 largest global economies in 2020, but will drop to 12 percent in 2035, or less if there is a bitter split between the EU and the United Kingdom, said CEBR.
He also said that the impact of the pandemic on the global economy is likely to appear in higher inflation, not slower growth.
“We see an economic cycle with rising interest rates in the mid-2020s,” said the document, representing a challenge for governments that have made massive loans to finance their response to the COVID-19 crisis.
“But the underlying trends that have accelerated at this point towards a greener and more technology-based world as we move into the 2030s.”