May 16, 2008

Indian economy can match US economy by 2050 – PWC

According to a report prepared by PricewaterhouseCoopers, India’s economy will grow to 90% of the size of the US economy by 2050 as the global centre of economic gravity is already shifting to China, India and other large emerging economies.

The report said that "Our latest projections suggest that China could overtake the US in around 2025 to become the world’s largest economy and will continue to grow to around 130% of the size of the US by 2050."

The study projects Brazil to overtake Japan by 2050 to move to the fourth place, while Russia, Mexico and Indonesia all have the potential to have economies larger than those of Germany or the UK by the middle of this century.

The report said that long term prospects for China, India, Brazil, Mexico, Russia, Indonesia and Turkey are still upbeat, but an additional 13 emerging economies also have the potential to grow significantly faster than the established Organization for Economic Cooperation & Development countries.

The report projects India to move ahead of China in GDP growth due to several factors, mainly the significantly slower labor force growth in China because of the rapidly-ageing population of over 45 years. On the other hand, the UN has projected India’s working age population to continue growing at a healthy rate.