China to Overtake the US to become World’s Largest Economy by 2028
In News
The Centre for Economics and Business Research (CEBR) said in an annual report published on26th December 2020, that China will be world’s biggest economy by 2028 by overtaking the US.
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- The recovery of China due to COVID-19 pandemic has made this estimation five years earlier than what was predicted.
- China’s performance improved with its proficient management of the pandemic with strict early lockdown.
- China is expecting average economic growth of 5.7 per cent a year from 2021-25 before slowing to 4.5 per cent a year from 2026-30.
- It was estimated by the report that the US will make a strong rebound in 2021 but its growth would slow to 1.9 per cent a year between 2022 and 2024, and then to 1.6 per cent after that.
- Japan would continue to remain at rank 3 till early 2030s
- After that India will take over pushing Germany down from rank fourth to rank fifth.
- It has been forecasted that the Indian economy will expand by 9% in 2021 and by 7% in 2022. India will become more economically developed with annual GDP revolving around 5.8% in 2035.
- The driving force for the recovery of the Indian economy was its agriculture sector.
- The CEBR says that India will become the world’s third largest economy by 2030, overtaking the UK in 2025, Germany in 2027 and Japan in 2030.
- United Kingdom would slip to rank 6th from 2024 itself that is currently at 5th rank.
- Despite the exit of Britain from EU in 2021, which itself explains the massive blow to the British economy in the coming years, it has been predicted that the British GDP in dollars will be 23% higher than that of France, the next major world economy by 2035. The driving force behind this has been forecasted to be the increasingly important digital economy.
- The report also predicts that the pandemic's impact on the global economy was likely to show up in higher inflation, not slower growth.
However in terms of India, if government resolves the bottlenecks in infrastructure sector then that will give a definite boost to the economy by attracting investment that will bring significant productive gains.
