PwC has a new thought piece on the world in 2050, based on PwC projections from IMF data for 32 countries comprising 85% of the world’s GDP (free online here and at the Reference Desk). In terms of growth, they posit that the global economy can double in size by 2050, “assuming broadly growth-friendly policies (including no retreat into protectionism).” They see major emerging market growth almost doubling that of advanced economies, resulting in China (#1), India (#2) and U.S (#3), with Indonesia a distant #4. the EU27, however, drops to less than 10%, smaller than India. They model the effect of an aging workforce by taking down global growth assumptions from 3.5% in 2020, then 2.7% from 2021-2030, 2.5.% for 2031-2040, and 2.4% for 2041-2050. The site contains interactive data to look at various countries, as well as a raft of general and country-specific policy recommendations, like structural reforms, diversification of economies, and better institutions.
Forward-looking projections like this can be very useful for scenario creation, whether the goal is to put resources behind growth opportunities or to challenge the existing operating model. Given the assumptions of the forecast, it might appear at first that PwC’s projections would be a good “base case” reflecting conventional wisdom on policy prescriptions and major trends. However, given the uncertainty surrounding political activity and economic dis-integration, strategists should consider treating this as the best case scenario and adopt more risk for base case.