March 29th, 2012
10:07 AM GMT
(Image credit: AFP/Getty Images)
(CNN) – India will overtake China as the world’s biggest economy by 2050, a new report says.
This follows China’s rise to the top spot in 2020 at the expense of the United States, according to the 2012 Wealth Report by Knight Frank and Citi Private Bank.
The survey was published as India hosts the BRICS summit of emerging economies, which also includes China, Russia, Brazil and South Africa.
The report predicts India’s GDP will reach $85.97 trillion in terms of purchasing power parity (PPP) by 2050, compared to China’s figure of $80.02 trillion for the same period.
The United States sits in third place at $30.07 trillion, with BRIC nations Brazil and Russia predicted to retain their position in the top 10.
Earlier this year, a report from the International Monetary Fund (IMF) expected India’s economy to expand “above trend” in 2011, with high levels of growth continuing over the medium term, spurred by “high investment in infrastructure and productivity gains.”
Interestingly, Indonesia, Nigeria, Mexico and Egypt are the other developing economies expected to take their place at the top table.
“Many poor economies have opened up and reached the modicum of institutional quality and political stability that are needed for fast growth and rapid catch- up,” said Willem Buiter, Citi’s Chief Economist.
James Lawson, a director with Ledbury Research, says much of this growth can be attributed to a few key areas, including natural resource development, manufacturing and construction.
The report adds that the losers will be western countries - in terms of output , at least.
Citi forecasts the North American and Western European share of world real GDP will fall from 41% in 2010 to just 18% in 2050. Developing Asia’s share is expected to rise from 27% in 2010 to 49% in 2050.
As if to reinforce the shift eastwards in wealth distribution, the report adds the region covering China, South-East Asia and Japan now has more centa-millionaires (those with over US$100m in assets) than North America or Western Europe.
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