World's largest economy: Study: China will overtake the US in 2028

Saturday 26 December 2020

World's largest economy
Study: China will overtake the US by 2028

British economists expect a change at the top of the economic hierarchy within the next decade. Then China will take over from the US as the world's largest economy. One of the reasons is the faster overcoming of the corona pandemic.

According to British economic experts, China will replace the USA as the world's largest economy as early as 2028 – five years earlier than previously expected. As the Center for Economics and Business Research (CEBR) explains in its annual report, China is recovering from the corona crisis faster and more strongly than the USA. "The Covid-19 pandemic and the associated economic effects favor China in this rivalry," wrote the economists. The success of its own tough measures against Corona and the setbacks for long-term economic growth in the west have improved China's relative economic strength.

Last year, China with a gross domestic product of 14.4 trillion dollars was still well behind the USA with 21.4 trillion dollars. However, the CEBR predicts average annual growth of 5.7 percent for the People's Republic from 2021 to 2025, and of 4.5 percent for the years 2026 to 2030.

The USA will recover strongly from the pandemic in 2021, but will only grow 1.9 percent annually between 2022 and 2024, after that an average of 1.6 percent. Japan is believed to remain the world's third largest economy for the time being until it is overtaken by India in the early 2030s. Germany will then slide to fifth place from its current fourth place. Great Britain see the researchers drop from the current place four to the sixth place.

The 240-page report devotes a very short paragraph to almost 200 countries. They indicate the effects of the crisis on the respective country and growth forecasts for the current and the coming year.

The economists summarize the corona pandemic very briefly: It could have been worse. It is true that the debt of many countries has risen. But the world economy will grow again and inflation rates will rise from the mid-20s. The trends towards a greener and technology-based world remain intact.