26 September 2017

The Philippines Seen to be among World’s Top 20 Economies by 2050


PricewaterhouseCoopers (PwC), a global professional services network with offices in 157 countries around the world, sees the Philippines as among the Top 20 economies worldwide by the year 2050. This is a “mere” 33 years into the future. The forecast is contained in a study published February 2017 and entitled “The Long View: How will the global economic order change by 2050?1

The study projects gross domestic product (GDP) through to the year 2050 for 32 of the world’s largest economies. These countries account for 85% of the entire world’s GDP. In order to arrive at its conclusions, the study used a “long term economic growth model” and took into account “projected trends in demographics, capital investment, education levels and technological progress.”

The modeling forecasts were complemented by a) opinions of five emerging markets (China, Nigeria, Colombia, Turkey and Poland) from senior partners of PwC senior economists in these countries; b) interviews with leading academics on the uncertainties regarding the modeling projections, the challenge of income inequality, the need for institutional reform and the implications of the study for business strategy; and c) summaries of other relevant PwC researches.

Some of the study’s key findings are summarized below, quoted verbatim from the PwC document:

  1. That the world economy could more than double in size by 2050, assuming broadly growth-friendly.
  2. Emerging markets will continue to be the growth engine of the global economy. By 2050, the E72 economies could have increased their share of world GDP from around 35% to almost 50%. China could be the largest economy in the world, accounting for around 20% of world GDP in 2050, with India in second place and Indonesia in fourth place (based on GDP at PPPs3).
  3. A number of other emerging markets will also take center stage – Mexico could be larger than the UK and Germany by 2050 in PPP terms and six of the seven largest economies in the world could be emerging markets by that time.
  4. Vietnam, India and Bangladesh are forecast to be three of the world’s fastest growing economies over this period.
  5. Today’s advanced economies will continue to have higher average incomes, but emerging economies should make good progress towards closing this gap by 2050.
In 2016, the Philippines were estimated to have had a GDP at PPP of US$ 802 billion, good for 28th place among the top 32 economies in the world. This is ahead of Vietnam (US$ 595B) but behind Malaysia (US$ 864B), Thailand (US$ 1.162 trillion) and Indonesia (US$ 3.028T) in Southeast Asia.

By 2030, incidentally less than 13 years from now, the Philippines are expected to rise four places to 24, with GDP at PPP of US$ 1.615T, ahead of Vietnam (US$ 1.303T) and Malaysia (US$ 1.506T) but behind Thailand (US$ 1.732T) and Indonesia (US$ 5.424T) in Southeast Asia.

By 2050, which is less than 33 years from the present, the Philippines are expected to break into the Top 20 world economies at number 19 with GDP at PPP of US$ 3.334T. The country will still be behind Indonesia (US$ 10.502T) in Southeast Asia but ahead of Vietnam (US$ 3.176T), Malaysia (US$ 2.815T) and Thailand (US$ 2.782T).

The Philippines’ economy will also be bigger than that of Italy (US$ 3.115T), Canada (US$ 3.1T), its former colonial master Spain (US4 2.732T), South Africa (US$ 2.57T), Australia (US$ 2.564T), Argentina (US$ 2.365T), Poland (US$ 2.103T), Colombia (US$ 2.074T) and the Netherlands (US$ 1.496T).

Crucially, by 2050, the United States will have dropped to third behind China and India, while Japan will have dropped to eighth from fourth in 2016; Germany to ninth from fifth in 2016; the United Kingdom to tenth from ninth in 2016; and France to twelfth from tenth in 2016.

Below is the complete ranking of the top 32 world economies in 2016 and forecasts for the years 2030 and 2050.

Projected rankings of economies based on GDP at PPPs (in constant 2016 $bn)
GDP
2016 Rankings
2030 Rankings
2050 Rankings
Country
GDP
Country
GDP
CountryGDP
1 China
21,269
China
38,008
China
58,499
2 USA
18,562
USA
23,475
India
44,128
3 India
8,721
India
19,511
USA
34,102
4 Japan
4,932
Japan
5,606
Indonesia
10,502
5 Germany
3,979
Indonesia
5,424
Brazil
7,540
6 Brazil
3,745
Russia
4,736
Russia
7,131
7 Russia
3,135
Germany
4,707
Mexico
6,863
8 Indonesia
3,028
Brazil
4,439
Japan
6,779
9 UK
2,788
Mexico
3,661
Germany
6,138
10 France
2,737
UK
3,638
UK
5,369
11 Mexico
2,307
France
3,377
Turkey
5,184
12 Italy
2,221
Turkey
2,996
France
4,705
13 S Korea
1,929
S Arabia
2,755
S Arabia
4,694
14 Turkey
1,906
S Korea
2,651
Nigeria
4,348
15 S Arabia
1,731
Italy
2,541
Egypt
4,333
16 Spain
1,690
Iran
2,354
Pakistan
4,236
17 Canada
1,674
Spain
2,159
Iran
3,900
18 Iran
1,459
Canada
2,141
S Korea
3,539
19 Australia
1,189
Egypt
2,049
Philippines
3,334
20 Thailand
1,161
Pakistan
1,868
Vietnam
3,176
21 Egypt
1,105
Nigeria
1,794
Italy
3,115
22 Nigeria
1,089
Thailand
1,732
Canada
3,100
23 Poland
1,052
Australia
1,663
Bangladesh
3,064
24 Pakistan
988
Philippines
1,615
Malaysia
2,815
25 Argentina
879
Malaysia
1,506
Thailand
2,782
26 Netherlands
866
Poland
1,505
Spain
2,732
27 Malaysia
864
Argentina
1,342
S Africa
2,570
28 Philippines
802
Bangladesh
1,324
Australia
2,564
29 South Africa
736
Vietnam
1,303
Argentina
2,365
30 Colombia
690
S Africa
1,148
Poland
2,103
31 Bangladesh
628
Colombia
1,111
Colombia
2,074
32 Vietnam
595
Netherlands
1,080
Netherlands
1,496

Notes and references:
1The Long View: How will the global economic order change by 2050?” online at PwC.
2 E7 refers to the emerging market economies of Brazil, China, India, Indonesia, Mexico, Russia and Turkey.
3 PPP means purchasing power parity, “a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries,” online at the Pacific Exchange Rate Service.

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