Flame to Burn Out for Australian Economy by 2050 – Research
A new research conducted by accounting firm PricewaterhouseCoopers (PwC) has forecast that the flame of economic high that Australia is currently enjoying will fizzle and burn out by 2050.
In the new world order, Australia will drop from the world's list of 20 largest economies, and be beaten by the economies of Argentina, Vietnam, Saudi Arabia and even Nigeria.
Australia, along with the other countries currently enjoying economic supremacy, will give in to the new world order because of the other countries' rapid urbanisation.
''That's a combination of . . . the continued urbanisation and the next phrase of development of these countries. And it's coupled with the demographics of these countries - young populations in a different cycle of growth," Jeremy Thorpe, PwC economist, told The Australian Financial Review.
"Urbanisation is driving a lot of this; we've seen it in China and we'll see the same situation in Vietnam and Brazil," he added.
Currently ranked 17th in PwC's 2011 list, Australia is foreseen to slide to 18th by 2030, with a GDP and PPP estimated at $US1,535 billion.
As to which countries will be included in the new world order, the PwC research pointed out that China will topple the United States to become the world's biggest economy with GDP of roughly US$53,856 billion in purchasing power parity terms. And in 37 years from now, India will be the world's third-largest economy, followed by Brazil and Japan, which according to Mr Thorpe, very much confirms somewhat the 'Asian Century.'
''The report shows that all the talk about the Asian Century is certainly very true,'' he said.
"Since the gold rush of the 20th century we've probably punched above our weight, but as the world is evolving we're coming back to the field."
"We've been a small but advanced economy, and as other larger economies become more advanced they will have to gain more importance than they historically have had," Mr Thorpe said.
2050 projected GDP at PPP (2011 $USbn)
1. China 53,856
2. US 37,998
3. India 34,704
4. Brazil 8,825
5. Japan 8,065
6. Russia 8,013
7. Mexico 7,409
8. Indonesia 6,346
9. Germany 5,822
10. France 5,714
The research, which was based on estimates of future purchasing power, growth in the working population, workforce education and growing prosperity among low-income countries, included 24 countries.