China will overtake the United States to become the world's largest economy in 2028, five years ahead of previous estimates. Overtaking will be determined by the different ability demonstrated by the two countries in the fight against the Covid19 pandemic and in the subsequent recovery. This was stated - according to what Reuters reports - by the think tank Center of economic and business research (Cebr) , which formulates analyzes and forecasts on leading economies.
“For a certain period – says Cebr – one of the themes that dominated the world economy was that of the soft rivalry between the two economies. But the Covid-19 pandemic and the corresponding economic collapse have undoubtedly worked in China's favor".
According to the Research Center, "China's skillful handling of the pandemic", with the strict and timely lockdown, and the blows dealt to long-term growth in the West, indicate that the relative performance of the Chinese economy has improved.
In practice, the impact of Covid-19 on world economic balances is expected to be long-term and risks, if not upsetting the existing balances, at least to significantly change the ranking of the strongest economies on the planet.
Looking at the numbers, China looks set for average economic growth of 5,7% a year between 2021 and 2025 and then slow to 4,5% a year from 2026 to 2030, according to Think Tank forecasts.
In parallel, the US is credited for a significant post-pandemic rebound in 2021 but US average growth is estimated to slow to +1,9% a year between 2022 and 2024 and then again to +1,6% after this date.
Japan, on the other hand, will remain the third largest economy in the world, valued in dollars, until the early 2030s when it will be overtaken by India, thus sliding Germany from fourth to therefore place in the world economy.
The UK, itself currently the fifth largest economy on the planet according to Cebu analysis, will slip to sixth place from 2024. However, despite the backlash it will suffer in 2021 as a result of leaving the European Union, it is seen to reach a in dollars 23% higher than that of France around 2035, a growth supported above all by the driving role of Great Britain in the growing digital economy.
Coming to Europe, Cebr credits the Old Continent with a 19% share in the turnover of the 10 world economies in 2020 but forecasts a drop to 12% towards 2035.
The impact of the pandemic on the global economy is the likely recovery of inflation, says Cebr, rather than a slowdown in growth. “We see an economic cycle marked by rising interest rates around the mid-2020s,” respond the analysts of the Advisory Center and this will pose a challenge to those governments that have massively increased debt to support the country's economy in response to the crisis caused by the Covid-19. But the underlying trend of the economy toward a greener, technology-driven model will also accelerate as we roll through the 2030s.
