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World Economic League Table 2016 Highlights

Slower Chinese GDP growth and a weaker currency mean that China is
now forecast to overtake the US in 2029 compared with 2025 in last year’s
forecasts.

Japan has the weakest forecast growth of all major economies and is
likely to be overtaken by both the UK and Germany during the 2030s.

Germany’s population is likely to be over a million larger than we
assumed last year because of migration, from Syria especially. As a result,
its GDP is no longer likely to be overtaken by the UK by 2030, although we
still expect this to happen during the following decade.

India is now starting to catch up with China and will eventually overtake in
the second half of the century.

Korea is overtaking most of the European countries and will be one of the
world’s top 5 economies at some point in the 2030s.

Some of the weaker European economies like France and Italy are
slipping way down the table. They face exclusion from bodies like the G-8
and possibly eventually the G-20 as their economies persistently
underperform.

Last year we forecast that Russia would do badly – the only thing we got
wrong is that they have performed even worse than we assumed. They are
likely to face a persistent decline down the league table and also face
exclusion from the G-8.

Oil and commodities based economies are forecast to do worse than we
previously expected, though we have prepared these forecasts on the
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assumption that the oil price will revert to $60-70 during 2016 as the world
economy recovers and the demand for oil revives.

The world’s fastest growing region over the next 15 years is likely to be
Central Asia. Its share of the global economy is forecast to have more than
tripled since the start of the new millennium, from 2.8% in 2000 to 9.9% in
2030. The world’s slowest-growing region is likely to be Western Europe,
with its share of the global economy falling by 42% over the same period.
Several of its economies are expected to drop out of the world’s top 8 and
top 20 economies which form the basis of the G-8 and G-20 clubs.

Lower down the table there are some interesting movements. By 2030,
Belarus, Sri Lanka, Kenya and Ethiopia will enter the top 60 world
economies for the first time in the modern era.

International bodies are likely to have to change their membership to
reflect the changing balance of economic power. If relative GDP levels are
the main criterion for membership of the G-8, by 2030 Italy, France and
Russia are likely to be kicked out while India, Korea and Brazil force
themselves in. For the G-20, Spain (which always ought to have been a
member on economic grounds) and the Philippines should join while
Argentina (falling to 38th in the league table) and South Africa are replaced.
If it is politically necessary to include an African country it should be
Nigeria (forecast in 2031 to be the world’s 25th largest economy) rather
than South Africa (forecast to be the 40th largest).

Tables showing this year’s rankings for the top 30 economies in the world
in 2015, 2016 and in 2031 are shown in Annex 1 to this press release
together with short notes on each of the countries forecast to be in the top
30 economies in 2031.
The latest edition of Cebr Global’s World Economic League Table (WELT) for 2016 reveals some
interesting moves as the world’s richest powers jockey for position. Cebr Global is the
international economics consultancy arm of Cebr, the economics consultancy.
The World Economic League Table tracks the size of different economies across the globe and
projects changes over the next 15 years. We call the score on the current year and forecast future
changes to 2031.
This year the main revisions reflect new forecasts for growth, exchange rates and oil and
commodity prices rather than data changes as last year. With China slowing down more suddenly
than had been expected, East Asian growth has been revised down. The weaker exchange rates in
emerging markets have been reflected in lower forecasts for GDP for some of these countries.
We have also revised down our oil price assumption again – the forecast was revised down from
$85 two years ago to $75 last year, because of greater energy efficiency and improved supply. This
year because of weaker demand the oil price forecast has been revised down slightly further to
$65.
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Comments: Cebr Acting Managing Economist Danae Kyriakopolou who heads Cebr’s global
research: ‘The World Economic League Table keeps track of which economies are rising and which
ones are falling.
China’s slower than expected growth and risks around the sustainability of its debt are reflected in
a delay in the date when it is expected to overtake the US as the world’s largest economy from
2025 to 2029.
Europe’s economic weakness is likely to be reflected in France, Italy and Russia being dropped
from the world’s G-8 Economic Club.
The world’s fastest growing region is forecast to be Central Asia. This is driven by fundamentals
and is likely to be reinforced by China’s One Belt One Road proposals.’
NOTES TO EDITORS
Cebr Global’s World Economic League Table (WELT) is an annual calculation by Cebr Global, Cebr’s global
economic consultancy. The base data for 2014 is taken from the IMF World Economic Outlook and the GDP
forecast draws on Cebr’s Global Prospects model to forecast growth, inflation and exchange rates.
Please refer to this in copy when quoting as The Cebr Global World Economic League Table or Cebr
Global’s WELT.
The Global Prospects Report is a quarterly report every three months. The report is part of The Prospects Service
– Cebr’s macroeconomic advisory package for business.
Cebr Global is a leading independent commercial economics consultancy based in London. The report has been
co-authored by the Cebr staff.
For more information, please contact:
Danae Kyriakopolou +44 (0) 7812 540 030 or +30 6945 890 792 email dkyriakopolou@cebr.com
Alastair Cavalla +44 (0) 7845 361 402 email acavalla@cebr.com
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Table 1
Cebr World Economic League Tables for 2014 and 2015
2014
2015
Rank
Country
GDP
($bn)
Rank
Country
GDP
($bn)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
United States
China
Japan
Germany
United Kingdom
France
Brazil
Italy
India
Russia
Canada
Australia
Spain
Korea
Mexico
Netherlands
Indonesia
Turkey
Saudi Arabia
Switzerland
Nigeria
Sweden
Poland
Argentina
Belgium
Taiwan
Norway
Austria
Islamic Republic of Iran
Thailand
17,348
10,357
4,602
3,904
2,950
2,860
2,347
2,167
2,051
1,861
1,785
1,443
1,419
1,410
1,291
889
889
798
746
704
574
571
548
543
539
530
500
442
416
405
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
United States
China
Japan
Germany
United Kingdom
France
India
Italy
Brazil
Canada
Korea
Saudi Arabia
Australia
Russia
Spain
Mexico
Indonesia
Netherlands
Turkey
Switzerland
Argentina
Taiwan
Nigeria
Sweden
Poland
Belgium
Norway
Islamic Republic of Iran
Thailand
Austria
17,968
11,385
4,116
3,325
3,039
2,418
2,183
1,816
1,800
1,573
1,393
1,341
1,241
1,236
1,219
1,161
873
749
722
677
586
519
493
484
481
458
398
397
374
372
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Table 2
Cebr World Economic League Tables for 2030 and 2031
2030
2031
Rank
Country
GDP
($bn)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
China
United States
India
Japan
Germany
United Kingdom
Korea
Brazil
France
Canada
Indonesia
Russia
Italy
Mexico
Australia
Saudi Arabia
Spain
Turkey
Philippines
Netherlands
Poland
Switzerland
Malaysia
Taiwan
Nigeria
Islamic Republic of Iran
United Arab Emirates
Thailand
Sweden
Hong Kong SAR
34,338
32,996
10,133
5,087
4,720
4,622
3,532
3,368
3,311
2,750
2,560
2,431
2,393
2,390
2,049
1,848
1,775
1,620
1,213
1,176
1,061
1,025
993
988
967
896
872
767
730
728
Rank
Country
GDP
($bn)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
China
United States
India
Japan
Germany
United Kingdom
Korea
Brazil
France
Canada
Indonesia
Mexico
Italy
Russia
Australia
Saudi Arabia
Spain
Turkey
Philippines
Netherlands
Poland
Switzerland
Taiwan
Malaysia
Nigeria
Islamic Republic of Iran
United Arab Emirates
Thailand
Sweden
Hong Kong SAR
35,262
33,656
10,629
5,094
4,767
4,691
3,638
3,491
3,362
2,788
2,628
2,433
2,428
2,422
2,066
1,848
1,803
1,704
1,262
1,195
1,083
1,036
1,004
991
968
916
896
771
748
738
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Country notes
China: By 2029 China will be safely positioned as the world’s largest economy. But its progress in that
direction is now likely to be slightly slower than we had expected last year as a result of two factors –
slower growth as the country transitions from export led growth to consumer based growth; and a weaker
renminbi as the country adjusts its exchange rate strategy to reflect China’s positioning of the renminbi as a
reserve currency.
United States: The United States remains the most successful of the world’s older economies and the
world’s technological leader. Indeed, as software becomes the world’s key industry, the US’s position as a
technology leader is reinforced.
India: The world’s most populous nation has made a start in 2015 in catching up with China, with faster
economic growth than China for the first time in recent years. But there is still a long way to go and India is
only likely to overtake China at some point in the second half of the 21st century. India will however
become the largest economy in the Commonwealth in 2019 when its economy overtakes the British
economy. India is also likely to force its way into the exclusive G-8 group of the world’s leading economies.
Japan: While the league table only shows Japan losing one place as India overtakes in 2022, in reality
Japan’s economic performance is one of the worst of the developed nations as a declining population, slow
productivity growth and a weaker exchange rate take their toll. At some point between 2030 and 2040
both the UK and German economies are likely to overtake the Japanese economy.
Germany: Our forecast for the German economy is improved from last year as a result of a much larger
population than we expected. The additional migration to Germany, mainly from Syria, will make the
German population 1 to 1½ million more than we had previously forecast. The additional migrants will
boost profits, restrain wage growth and alleviate skill shortages. As a result we no longer forecast that
Germany will be overtaken by the UK by 2030 as we predicted last year. However, as the UK is still
expected to grow faster than Germany, it is likely to overtake during the following decade. Germany is
forecast to be held back by the weakness of the rest of the EU which it will be increasingly forced to
subsidise if the euro is to survive.
United Kingdom: The United Kingdom is forecast to be the best performing economy in Western Europe
and after overtaking France in 2014 is likely to overtake Germany and Japan during the 2030s. Indeed the
UK could reach the giddy heights of becoming the world’s 4th largest economy for a short time during the
2030s if it manages to overtake Japan before it itself is overtaken by Brazil. The UK’s strength (though
mainly in London) is its cultural diversity and its strong position in software and IT applications. Its
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weakness is its bad export position and unbalanced economy, with many parts of the country heavily
dependent on subsidies from the relatively high taxes levied on Londoners. It also runs the risk of breakup,
with Scotland and possibly Northern Ireland seceding and will have a referendum on its continuing
membership of the EU in 2016 which might prove at best disruptive and at worst lead to a more insular and
less diverse culture which in turn would generate slower growth.
Korea: Korea is forecast during the next 15 years to join the big boys of the world economy, rising from 14th
place in the league table in 2014 to 7th in 2031. This growth should lead to membership of the exclusive G-8
grouping of the world’s leading economic nations. Korea’s success is based on manufacturing strength but
will increasingly be based on technology. It also has an electorate, a civil service and a government that
believes that business is good for the economy.
Brazil: For a country that looked as if at one time it might have overtaken the UK (revised data shows that
in fact it didn’t) 8th place in the league table will be a disappointment. Yet Brazil will still be one of the big
beasts in the world economy and should force its way into the exclusive G-8 group of the world’s leading
economies. Brazil has lost its way slightly in recent years, focusing on prestige projects and hosting
international sporting events rather than on continuing economic reform.
France: Although France continues militarily to punch above its weight, replacing the UK as the US’s leading
military partner in the Middle East, economically the picture is dire. Although the Manuel Valls government
is one of the more impressive French governments of recent years and has started to roll back the mistakes
of its predecessor, the pace of French economic reform is far too slow even for the economy to tread water
in the world economy. France is forecast to slip from being the 5th largest world economy in 2013 to the 9th
largest by 2031, leading it no longer to qualify on economic grounds for membership of the G-8 largest
economies.
Canada: Canada in recent years has been one of the most impressively run of the world’s largest countries
but the election of Mr Trudeau as Prime Minister hints that Canadians have tired of economic reform.
Unfortunately the hectic pace of world economic change does not allow people to take holidays from
economic improvement and although Canada is forecast to remain the world’s 10th largest economy, it may
lose its position in the exclusive G-8 club of the world’s largest economies (actually Canada never qualified
on purely economic grounds anyway but with the Indian economy by 2031 as much as 3 times the size of
the Canadian economy, the discrepancy will become too large to ignore).
Indonesia: As Indonesia manages to continue economic reform after the change in government, fears that
its impressive economic growth might grind to a standstill have proved groundless and the economy has
even withstood the Chinese economic slowdown and the backlash to the US interest rate rise. Forest fires
and toxic haze remain a dampener on the economy and have also affected neighbouring Malaysia.
Indonesia rises from 17th position in the league table in 2014 to 11th position in 2031.
Mexico: Mexico is gradually catching up with Brazil to become the largest economy in Latin America as a
result of its faster economic growth. The pace of catchup is gradual, however, and overtaking is unlikely to
happen much before the middle of this century.
Italy: The world’s slowest growing major nation (no real GDP growth at all between 2000 and 2014) is likely
to continue its fall down the league table and pressure for it to lose its membership of the world’s exclusive
G-8 economic group is likely to prove successful since by 2031 Italy is forecast to be only the 13th largest
world economy.
Russia: We forecast last time that Russia would perform badly to the backdrop of criticism from the Putin
propaganda machine. In reality our only mistake was to be overcomplimentary to the Russian economy
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which in fact has performed even worse than we predicted. This year the country has dropped from 10th
position in the world economy to 14th position which it is expected to hold over the period to 2031. The
maintenance of 14th place is predicated on a recovery in the oil price and some, though limited,
diversification. Even if both of these happen, Russia is likely to lose its place in the world’s G-8 group of
major economies.
Australia: The forecasts show Australia dropping from being the world’s 12th largest economy in 2014 to its
15th largest in 2031. In reality, this is almost entirely due to the weakness of the world’s markets for energy
and minerals over the forecast period and the underlying performance is rather better than the position in
the league table suggests. Meanwhile the changing ethnic composition of the population, despite strict
migration controls, means that the ‘we’re off to the beach’ attitude to working of many urban Australians
will be challenged while diversity will boost creativity. In any case, Australians can take comfort from the
fact that Cebr’s statistical research confirms that the performance of its national cricket team is negatively
correlated with the economy http://www.gresham.ac.uk/lectures-and-events/is-it-really-the-case-thateconomic-success-is-negatively-correlated-with
Saudi Arabia: The outlook for the Saudi economy is heavily based on the outlook for oil. As oil prices are
forecast to pick up from their current lows we forecast an improvement in Saudi Arabia’s global rank on the
WELT. However, as prices are expected to remain relatively weak with any improvement fairly marginal,
and given Saudi Arabia’s poor performance when it comes to diversification, our forecast for the level of its
GDP in dollar terms is actually lower than what was expected in last year’s report.
Spain: The Spanish economy is forecast to slip down the table from 13th place in 2014 to 17th in 2031. This
reflects the broader trend of slower growth in Western Europe but also particular structural hurdles in
Spain’s economic development such as the ‘hangover’ from the crisis in the form of high unemployment
and skills decaying, especially among the youth. But Spain is still likely to perform better than France or
Italy and will eventually replace Italy as the largest economy in Southern Europe.
Turkey: Turkey’s rank is expected to stay flat at 18. On the one hand, strong demographics and closer
economic relationship with Europe should help support its development. However, at the same time
political instability and geopolitical uncertainty in its neighbourhood will weigh on performance.
Philippines: The economy of the Philippines is expected to see one of the most impressive moves in the
WELT, from 40th place in 2014 to 19th place in 2031. Despite some recent hits from severe natural disasters,
the fundamentals of strong demographics, a force for urbanisation, and close links to the US and the rest of
ASEAN should help it see rapid development.
Netherlands: In a similar fashion to most Western European economies, the Dutch economy is forecast to
slip down a few places in the WELT, from just outside the top 15 in 2014 to just about in the top 20 in 2031.
Poland: Poland is forecast to see a gentle hike from 23rd to 21st place in the WELT, as continued economic
development and rising living standards raise GDP per capita in line with Western European levels.
Switzerland: The Swiss economy moves down two places in the rankings, from 20th to 22nd between 2014
and 2031. This is more to do with the strength and dynamism of the emerging markets that are overtaking
it however, rather than weakness in Switzerland per se.
Taiwan: Strong room for catch-up development and increased linkages with its economic neighbourhood
should help Taiwan climb up the ranks of the WELT from 26th place in 2014 to 23rd place in 2031.
Malaysia: The forces behind Asia’s emergence as a fast-growing spot in the global economy such as strong
demographics, regional integration, and a move up the value chain as China itself becomes more of a
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services-based economy are expected to help Malaysia see an important rise up the ranks from 35th place
in 2014 to 24th in 2031.
Nigeria: After overtaking South Africa’s economy the Nigerian economy is expected to slip down a few
places (yet still remain ahead of South Africa as the world’s 25th largest economy). This is mainly because of
a weaker outlook for oil prices – an important export for Nigeria.
Iran: After years of crippling economic isolation, Iran is emerging as a bright spot in the global economy.
The lifting of sanctions, a more moderate political regime, and strong demographics and other
socioeconomic factors help it rise up the ranks of the WELT from 29th place in 2014 to 26th in 2031. This is a
considerable revision from our forecast two years ago that saw Iran reach 55th place by 2028. A fuller
analysis of Iran’s economy is provided in Cebr’s special Iran report, available on our website.
United Arab Emirates: After some weak years from low oil prices and a weak property sector the UAE is
expected to see some stronger growth fuelled by the fruits of diversification and the rapid development of
Dubai and Abu Dhabi, helping it rise from 31st place to 27th.
Thailand: Thailand’s economy is forecast to see a marginal improvement in its global economic rank, in line
with the broader trend of strong economic growth in Southeast Asia. Despite some troubles in the short
run such as capital outflows in the face of the Fed rate hike and a knock-on effect from China’s slowdown,
the fundamentals remain strong.
Sweden: Although Sweden falls from 22nd place in the league in 2014 to 29th in 2031, it in fact remains one
of the faster growing European economies, benefiting from staying out of the Euro and from the
emergence of a ‘Flat White Economy’ especially in Stockholm.
Hong Kong SAR: Being Asia’s most important financial hub, Hong Kong is expected to benefit considerably
from China’s rebalancing into more of a services-driven and consumer-oriented economy, and also from
the rise and internationalisation of the renminbi. Despite London’s efforts to become the most important
financial hub for the renminbi, Hong Kong is also well placed to take advantage of this development given
its strong ties to mainland China. Given all this, we see it as one of the most impressive players in the
league table, moving up from 38th place in 2014 to 30th place in 2031.
ENDS
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