The United States can kiss its position as the world’s largest economy goodbye in a few years, as China and India outrun it, according to new projections by OECD.
Over the next five decades, the global balance of economic power will “shift dramatically,” according to a report from the group, which is known officially as the Organization for Economic Co-Operation and Development.
As early as 2016, China’s economy will exceed that of the U.S., as will India’s down the line, according to the forecast, which made its calculations using purchasing power parity. China will surpass the eurozone within a year while India will race ahead in 20 years.
In just over a decade, the two giants together will surpass the collective gross domestic product of all the G7 nations – countries such as Japan, France and Canada that are considered to make up the developed world.
And it’s not just the so-called Twin Tigers that are ramping up. OECD foresees established countries such as Japan losing ground to nations such as Indonesia and Brazil.
Once the effects of the recent economic downturn wear off, the global economy is expected to grow at a 3% annual rate for the next 50 years, according to OECD.
Income per capita will more than quadruple in the world’s poorest countries in that time and may boom sevenfold in China and India. The gauge will only double in the richest areas.
But light-speed growth doesn’t mean that residents of developing countries will catch up to their counterparts in North America, the eurozone and Japan.
In 2060, living standards in China will be at 60% of the level of leading countries, while per-capita income in India will be a mere quarter of the measure in advanced nations, according to OECD.
"As the largest and fastest-growing emerging countries fully assume a more prominent place in the global economy, we will face new challenges to ensure a prosperous and sustainable world for all,” said OECD Secretary-General Angel Gurria in a statement.
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