China will jump out of the US as the world’s largest economy by 2028: the think tank

LONDON (Reuters) – China will overtake the United States to become the world’s largest economy in 2028, five years earlier than previously estimated due to the two countries’ contrasting recoveries from the COVID-19 pandemic, a group said. reflection.

“For some time, a general theme of the global economy has been the struggle for soft and economic power between the United States and China,” the Center for Economic and Business Research said in an annual report released on Saturday.

“The COVID-19 pandemic and the corresponding economic consequences have certainly tipped this rivalry in favor of China.”

CEBR said that “China’s skillful management of the pandemic”, with its strict early blocking and impact on long-term growth in the West, means that China’s relative economic performance has improved.

China seemed ready for an average economic growth of 5.7% per year from 2021-25, before slowing to 4.5% per year from 2026-30.

While the United States is likely to have a strong post-pandemic recovery in 2021, its growth will slow to 1.9% per year between 2022 and 2024, and then to 1.6% thereafter.

Japan will remain the third largest economy in the world, in dollar terms, until the early 2030s, when it will be overtaken by India, pushing Germany down from fourth to fifth.

The UK, currently the fifth largest economy after the CEBR measure, will slip to sixth place in 2024.

However, despite a success in 2021 since its exit from the European Union’s single market, Britain’s GDP in dollars was forecast to be 23% higher than France’s by 2035, aided by the UK leader. in the increasingly important digital economy.

Europe accounted for 19% of production in the top 10 global economies in 2020, but it will drop to 12% by 2035, or less if there is a fierce divide between the EU and the UK, CEBR said.

He also said that the impact of the pandemic on the global economy is likely to appear in higher inflation, not in slower growth.

“We see an economic cycle with rising interest rates in the mid-2020s,” he said, challenging governments that have borrowed heavily to finance their response to the COVID-19 crisis.

“But the basic trends that have been accelerated by this point towards a greener and more technology-based world as we move into the 2030s.”