In its report, “Long Term Macroeconomic Forecasts: Key Trends to 2050,” the EIU said: “Our extended long-term forecasts suggest that Asia’s rise will continue up to 2050 -- not quite the same pace, but by 2050 it will account for 53% of global GDP
(gross domestic product).”At present, Asia contributes to about one-third of the global economy, the London-based EIU, a unit of The Economist magazine.
Earlier studies by the Asia Development Bank, the PricewaterhouseCoopers, and by HSBC Global Research also project a shift in global economic power to Asia by 2050.
China, now the biggest Asian economy, will emerge the world’s richest by 2050 with nominal GDP seen to reach $105.92 trillion, the EIU said.
It is expected to overtake the United States by 2026.
Along with the US ($70.91 trillion) and India ($63.84 trillion), China will emerge “richer than the next five economies put together,” added the report.
The EIU projects Indonesia, Germany, Japan, Brazil and the United Kingdom as the next five economies, with GDP adding up to about $52.67 trillion.
With the foreseen dominance of China and India, the two countries are also expected to take up more of a load in terms of addressing global issues like climate change, international security, and global economic governance.
The same report also pointed out that Philippine work force can grow to about 75 million by 2050, nearly double the 40 million recorded in 2014, making it the third fastest in work force growth.
The increase in the country’s labor pool is expected to account for 1% of the projected growth of the Philippines from 2019 to 2050, which the EIU estimates at about 4.5%.
So far, the Philippine government is eyeing 7%-8% growth by 2016.
Increased capital and total factor productivity are expected to drive the Philippine economy, the EIU said.
Nigeria is expected to triple its labor force in the next decades -- topping the estimates -- followed by Pakistan, which will likely double its working population.
“These economies will primarily benefit from favorable demographics in the forecast period, with higher birth rates supporting a healthy supply of workers,” the EIU said, adding that these countries must sustain policies to sustain employment to fully tap its labor capital for economic growth.
In contrast, the supply of labor in Japan, Germany and Thailand is expected to decline and could drag down growth, the EIU said.
The study covers 82 economies.
The EIU computes its long-term projections based on a number of factors, including the availability of an educated work force, the openness of an economy to trade, quality of legal and bureaucratic institutions, fiscal policy, degree of government regulation, movements in working-age versus total population, income gaps with the US, and GDP growth forecasts.
