India: World's Largest Economy by 2050


New World Players

Almost all investors are betting on emerging nations for their money. However, it is predicted that not all such countries will prosper at the same rate. International Monetary Fund (IMF), however, said that would face a “hard landing” due to asset price growth and buoyant credit, which have instigated consumer demand. IMF predicts a growth rate of 5.4 percent in 2012 and 5.9 percent in 2013 for emerging countries.

Citi makes a forecast that the share of real GDP of North America and Western Europe will dip to just 18 percent in 2050 from 41 percent in 2010. On the contrary, Asia’s share will rise to 49 percent from 27 percent. China will overtake the U.S. as the world’s largest economy by 2020, while India will become so in 2050.

Citi research also states that India and China will grow tremendously in the coming 40 years. Still, many other nations will also exhibit significant growth. It is surprising to find Brazil and Russia absent from Citi’s list of Global Growth Generators (3G) nations. This is so because Brazil and Russia are part of the BRIC nations. On the other hand, Citi includes the following nations in its list – Vietnam, Sri Lanka, Philippines, Nigeria, Mongolia, Iraq, Indonesia, Egypt and Bangladesh.

Willem Buiter, Citi’s Chief Economist, quotes, “All of these countries are poor today and have decades of catch-up growth to look forward to. Some of them, including Nigeria, Mongolia, Iraq and Indonesia, also have large natural resources that we hope will be more beneficial than they so often have been in the past.”

A few other countries to be watched out for, as given by Citi, are – Iran, Thailand, Turkey, Mexico and even Brazil. These nations will first have to mend their political structures before making it to the 3G list.