PWC’s: The World in 2050
PricewaterhouseCoopers (PWC) has recently released a report analysing how the world economy could look in 2050. As countries with large populations; including Saudia Arabia, Vietnam, Nigeria, Bangladesh and Iran, continue the urbanisation process Australia was predicted to slip from 19th in the world currently, down to 28th position by 2050.
PWC’s Jeremy Thorpe said Australia must move away from dependence on mining and invest more in science and technology. “We really need to have a long-term plan for innovation and that probably means investing in STEM: science, technology, engineering and maths.”
According to the report, the world economy is projected to grow at an average rate of just over 3 per cent per annum from 2011 to 2050, doubling in size by 2032 and nearly doubling again by 2050.
PWC’s 20 largest economies in 2050:
1. China
2. United States
3. India
4. Brazil
5. Japan
6. Russia
7. Mexico
8. Indonesia
9. Germany
10. France
11. United Kingdom
12. Turkey
13. Nigeria
14. Italy
15. Spain
16. Canada
17. South Korea
18. Saudi Arabia
19. Vietnam
20. Argentina
China is projected to overtake the US as the largest economy by 2017 in Purchasing Power Parity (PPP) terms, and by 2027 in Market Exchange Rate (MER) terms.
India is then predicted to become the third “global economic giant” by 2050, and Brazil is predicted to move up to 4th ahead of Japan.
The report said both China’s and India’s success would be in part due to their increasing involvement in developments of information communication technology, biotechnology and nanotechnology.
The E7, or the Top Seven Emerging Economies (China, India, Brazil, Russia, Indonesia, Mexico, and Turkey), are forecast to be 50 per cent larger than the G7 economies (US, Japan, Germany, UK, France, Italy and Canada) when measured by Gross Domestic Product in market exchange rate terms, by 2050.
“China, India, Brazil and the other emerging markets highlighted in our study will become not just low cost production locations but also increasingly large consumer markets,” the report said.
“At a time when trend annual growth is projected to be no more than around 2 per cent in the advanced economies, companies seeking growth will need to look increasingly to these emerging markets.”
Read the full report here.
To learn more about our funds, please click here, or contact me, David Buckland, on 02 8046 5000 or at dbuckland@montinvest.com
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
xiao fang xu
:
PricewaterhouseCoopers (PWC) has recently released a report analysing how the world economy COULD look in 2050.
how accurate are those predictions ?
who are WE –The Central Committee of Australia ?
why should we build submarines at all ?
“Bring back a science minister, reinstate maths as a cumpolsory subject in high school if it hasn’t already and develop better tax incentives that promote R&D in “new-economy” business/services/products and products as well as encouraging start up technological ventures.”
Why not abolish all government jobs and position and remove all Regulations and Licensing and let FREE MARKET DECIDE what is needed.
Do You believe in free market or not ?
Roger Montgomery
:
Watching Malcom Turnbull last night on Q&A going on about Australia having to be be “More productive, smarter and innovative”, made me wonder why the LNP has cut so much funding to R&D and why we don’t have a tax regime that incentivises entrepreneurs like Singapore. Then he said “we have to be more cost effective at every level”. Later he explained that government was “a third of the economy” but didn’t say that was cost ineffective. Further, a three year term is simply not enough time to get the job done. If the states changed to a four year term, our federal government should go for at least four years and perhaps five as we have in the UK.
Andrew Legget
:
Xiao, personally i don’t believe in any ideology whether it be 100% free markets or 100% central planned.
I always think the true solution always lies somewhere in the middle of extremes and that no perfect scenario will ever exist in anything anywhere. We simply need to make sure that we make the best decisions we can as individuals and as a collective group who our politicians (should) represent.
My comment below is simply asking the question about why is it that we have to off-shore many of our needs/assets/businesses to other countries in order to get quality or value when, as a developed economy, we should already have the ability to match it on the world stage.
We need a good honest look at many of our underlying structures as Roger has stated, to allow an environment where Australia can start to generate economic value that allows us to have a more sustainable and competitive economy that we all want.
Andrew Legget
:
“PWC’s Jeremy Thorpe said Australia must move away from dependence on mining and invest more in science and technology. “We really need to have a long-term plan for innovation and that probably means investing in STEM: science, technology, engineering and maths.”
This is so very true that i think it needs to be repeated. This is something i really do feel strongly about. We need an environment where Australia is manufacturing and exporting technological goods that have real value to add to the economy. We need to compete on knowledge and not on volumes of commodity products.
The current debate regarding where submarines should be built in Australia is an enlightening one. Many state that Australia does not have the capability or knowledge to build submarines that can compete with others worldwide. Why is this so?
There are so many markets that with the appropriate incentives and institutions in place that Australia could create a comparative advantage in. However, there appears to be little regard to try and act on this. Although if the rumours are true about Joe Hockey explaining to his party members technology’s impact on the economy and where the future lies than i have to commend him for that as it shows perhaps their is hope.
We cannot sustain an economy built for the most part entirely around the extraction and exportation of cyclical commodity products unless we all decide we are happy living in a boom and bust economy or happy to sacrifice our current living standards. As this is unlikely to happen we really need to sit down, be adult and have everyone who help, develop and implement sensible policies that encourage this behaviour and for politicians to stop talking in soundbites. Ok, now my rant is over some suggestions.
Bring back a science minister, reinstate maths as a cumpolsory subject in high school if it hasn’t already and develop better tax incentives that promote R&D in “new-economy” business/services/products and products as well as encouraging start up technological ventures.
Sorry if this did get a bit ranty, it is just an area that i am passioante about.
Roger Montgomery
:
Me too Andrew. Read this: http://rogermontgomery.com/wp-content/uploads/2015/01/Monty_December-6.pdf