Predicting the future is a difficult task, especially when it comes to foreseeing the wealth of nations.
Any projections of the new world order in the next decades involve complex analysis of vital economic systems and infrastructure. The quality of a nation’s education system and democratic institutions, fertility rates and rule of law, are all considers. This allows analysts to predict GDP and per capita income in light of the path that will take each nation towards the year 2050.
HSBC have made some very scientific predictions on which countries will be the richest in 2050, studying the economies of 100 nations. Some of the conclusions are startling. The Philippines is expected to grow at such a rapid pace that they will become richer than 27 countries over the next few decades, jumping from the 43rd spot to become the 16th richest country on Earth. Sweden, on the other hand, is predicted to drop out of the top 20 richest countries, falling all the way down to the 38th richest nation.
The biggest movers among the richest countries on Earth all have large populations that are beginning to catch up on the rest of the developed world, with large working populations. The biggest projected losers – many of them very well-developed countries – all have top-heavy, aging populations that reduce the size of the work force.
How will the world economy look in 2050? These are the best guesses based on what’s known in 2015.
15. Russia – $1.87 trillion
Despite forecasts stating that Russia’s working population will decline by a whopping 31%, Russia’s economy is predicted to leapfrog over Australia and Argentina by 2050. It’s set to rise two spots to make the top fifteen.
Current challenges facing the Russian economy include sanctions put in place by the international community as a response to the annexation of Crimea, and continued military threat in Ukraine.
The recent plunge in oil prices has also affected the Russian economy negatively, causing the ruble to plunge sharply. Inflation has also spiked, rising to 9.1% in November 2014 – the biggest rate increase since 2011.
14. Spain – $1.95 trillion
Spain’s recent economic problems are mainly the result of a housing bubble that saw prices rise by 44% between 2004 and 2008. The bubble burst, wiping out a third of the value of the Spanish housing market.
This, combined with an 11% reduction in the working population, is predicted to result in Spain moving down two spots on the list of richest countries in 2050.
It’s not all bad however, as Spain will enjoy a 3% average increase of per capita GDP during the twenties, thirties and forties – well above the average for the developed world as a whole.
13. South Korea – $2.06 trillion
Similar to Spain, South Korea will lose two ranks on the world rich list due to the rapid growth of Turkey and Mexico. South Korea has experienced a reduction in fertility over the past twenty years, which will result in a shrinking workforce.
This country boasts one of the biggest economic success stories over the past 40 years, rising twelve spots on the list of the world’s richest countries since 1970, breaking into the top 15.
The South Korean government supports economic growth through large, family owned companies referred to as chaebol, who make up the business elite of the nation, tasked with bringing prosperity to the country.
12. Turkey – $2.15 trillion
Turkey will enjoy the biggest leap of all the countries on this list, rising six spots to become one of the 15 richest nations in 2050. The country will move past the Netherlands, Russia, Australia, South Korea, Spain and Argentina.
Turkey will experience a healthy increase in the working population due to above average fertility rates. This allows the country to take advantage of fundamental economic strengths moving forward.
Over the past decade, the income of Turkish citizens per capita has almost tripled, surviving and even thriving throughout the 2008 global economic crisis. In the past five years, foreign direct investment has increased by $13 billion, further encouraging growth.
11. Italy – $2.19 trillion
Italy is another Eurozone country that will experience difficulty due to changing demographics, with a reduction in their working population predicted to reach 23%. As a result of this and other problems with their economic infrastructure, Italy is projected to fall from seventh to eleventh richest country in the world by 2050.
Since the inception of the European Union, Italy’s economy has only grown four percent in 16 years. This is the same growth that Greece has experienced, despite the latter’s very rocky finances.
Projections for 2015 are that Italy will experience the second slowest growth in the E.U., behind only Cyprus, expanding its GDP by 0.6%.
10. Canada – $2.29 trillion
Canada is the only country on this list projected to stay put, currently ranked as the tenth richest country in the world and projected to remain tenth in 2050. Despite this lack of change, Canadians are expected to rise three spots in per capita income, rising from 15th to 12th in 2050.
The Canadian economy weathered the storm of the economic crisis due to a strong banking system ranked among the most stable in the world.
This hasn’t saved Canada against the recent dive in oil prices. The loonie has lost ground against the American dollar at a rapid rate because of Canada’s investment in tar sands oil production, which is only profitable when oil prices are high.
9. France – $2.75 trillion
Not exempt from the economic challenges faced by other financial heavyweights of the E.U., France will fall from sixth to ninth richest country in the world by 2050, with Brazil, India and Mexico climbing above the French.
Projections state that compared to the rest of the developed world, France will lag behind in terms of development of per capita income during the next few decades.
The past few years have been difficult for the French economy, with stagnant growth that’s averaged 0.3% per year since 2008, especially compared to Britain’s economy, which is slated to rise by 3.2% in 2015.
8. Mexico – $2.81 trillion
Currently the 13th richest country in the world, Mexico is poised to make a huge leap into the top ten, projected to rise five spots to become the eighth richest country in 2050, rising above France, Canada, Spain, South Korea and Italy.
Ironically, despite this jump in wealth, the average per capita income for Mexicans is predicted to fall five spots, from 42nd in the world to 47th.
President Nieto has spearheaded policy changes that deal with eleven structural concerns in the 20 months after he achieved presidency. Changes in education, energy, telecommunications, labor, competition and the financial sector are expected to improve prosperity and productivity in the near future.
7. Brazil – $2.96 trillion
Ever since the period between 1986 and 1994 in which Brazil experienced annual inflation in excess of 500%, the country has rebounded to continue operating as one of the biggest economies in the world.
Their growth in prosperity is expected to continue for the foreseeable future, with Brazil rising two spots over France and Italy to become the seventh richest nation on Earth. Unfortunately, per capita income for Brazilians is expected to drop by nine spots from 52nd to 61st in the world.
In addition to an increase of the working population of this country, Brazil is making a concerted effort to improve education and reduce crime as part of an effort to lift the prosperity of all Brazilians.
6. United Kingdom – $3.58 trillion
By 2015, the United Kingdom is projected to narrow the difference by half between itself and the German economy, the biggest in Europe. Currently, Germany is $346 billion ahead of the British, while in 2050 the gap between the two will be $138 billion.
Both Germany and Britain will drop one place in the standings because of the surging economy of India, which recently broke the trillion dollar mark.
The United Kingdom was a leader of the industrial revolution during the 19th century, setting the table for the rise of industrialization throughout the 20th century world.
Currently, both American and Japanese companies prefer Britain as their destination for European outlets of their companies.
5. Germany – $3.71 trillion
Germany is projected to be the largest economy in Europe in 2050, holding off the United Kingdom to remain as one of the top five richest countries on the planet – although India is expected to overtake the Germans in the meantime.
Despite falling from fourth to fifth, German income per capita will rise eight ranks from 18th to 10th in the world, likely due a population reduction of 11 million between 2010 and 2050.
Germany will experience the greatest reduction in its working population of all the E.U., suffering a decline of 29%. Despite this reduction, solid funding and a strong economic infrastructure will ensure the country’s economy remains stable.
4. Japan – $6.43 trillion
With a rapidly aging population, Japan is looking to overcome the worst demographic problems out of all the richest countries, with an incredible projected decline in working population of 37%.
In addition to an aging population, Japan’s fertility rate is the lowest of all the richest countries, with an average of 1.3 children per person, similar to Germany. As a result, Japan will see a reduction in population of 25 million, more than twice Germany’s reduction.
Nonetheless, as Japan figures out how to deal with a shrinking workforce paying for the social services of an aging society, they will still be the fourth richest on Earth.
3. India – $8.17 trillion
India is an example of the economic benefits of a growing population, ranking in the top five in terms of countries that will experience a surge in working population. As of 2050, India projects to be the third richest country on Earth and the most populous, overtaking China to become the first country with a billion and a half residents.
By copying foreign economic policies and taking advantage of modern technology, India expects to be one of the engines of worldwide economic growth. The country falls under the category of a fast-growth economy, predicted to enjoy an average annual growth of 5% or greater, partly due to low levels of current development.
2. United States – $22.27 trillion
All economic infrastructure indicators are strong for the United States, such as a strong democracy, rule of law and population demographics that includes an above average fertility rate. Nonetheless, the richest country on Earth for several decades will fall to become the second richest by 2050.
Among the developed world, the Unites States will experience some of the most sluggish growth in terms of income per capita over the upcoming decades, with only Luxembourg and Norway undergoing slower increases.
Currently, the Unites States is twice as rich as the next biggest economy, Japan, and will likely be considered leaders of economic activity and policy past the halfway mark of this century.
1. China – $25.33 trillion
The richest country in the world in 2050 is predicted to be China. The country is expected to have absorbed Hong Kong and Macao into their economic systems by 2049, providing enough of a boost to take the top spot.
China’s population growth is being slowed by the one-child policy, however, causing a reduction in the country’s working population by 2050.
Their population will still be the second biggest on Earth in 2050, and citizens will benefit from China’s continued push to fully modernize its economy. China will catch up with the development of the most advanced nations, spurring the same type of growth that resulted in China’s boom in recent decades.
bloomberg.com, cbc.ca, financialpost.com, telegraph.co.uk, brittanica.com, hsbc.com
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