by A research paper published Tuesday by Goldman Sachs projects Pakistan will be the world’s sixth-largest economy by 2075, provided “adequate policies and institutions” are in place.
Authored by economists Kevin Daly and Tadas Gedminas, the paper entitled “The Path to 2075” predicts that the top five economies by 2075 will be China, India, the US, Indonesia and Nigeria.
Goldman Sachs has been forecasting the long-term growth of countries for nearly two decades, initially based on the BRIC economies, but over the past 10 years they have expanded those forecasts to include 70 emerging and developed markets.
Their latest paper covers 104 countries with forecasts stretching back to 2075.
The economists particularly emphasize “environmental catastrophe” and “populist nationalism” as the main risks for their forecasts.
Unless a globally coordinated response ensures a path to sustainable growth, climate change could severely skew these projections, particularly for countries like Pakistan with vulnerable regions.
According to the report, if populist nationalists come to power in many countries, this could lead to increased protectionism, which could potentially reverse globalization and thereby increase income inequality between countries.
Other important projections
Global growth on a declining path
The paper notes that global growth has slowed to 3.2 percent from an average of 3.6 percent per year over the past 10 years, and the slowdown has been relatively broad-based.
They forecast global growth averaging 2.8 percent between 2024 and 2029 and a gradual declining path.
The rise of emerging markets
As global growth slows, emerging markets are growing faster than, and will continue to converge on, developed markets.
“The weight of global GDP will shift (even) more towards Asia over the next 30 years as China, the US, India, Indonesia and Germany lead the list of largest economies measured in dollars. Nigeria, Pakistan and Egypt could also be among the largest.”
shrinking world population
The decline in global growth is being driven by the decline in population growth, which the UN predicts will drop to near zero by 2075. The paper says this is a “good problem” as it reduces environmental damage but could cause economic problems due to high healthcare costs and an aging population.
The US will not repeat exceptional growth
The US will not be able to repeat its strong performance of the past decade, with potential growth remaining “significantly lower” than that of the major emerging markets.
The US dollar is also expected to weaken over the next 10 years.
Less global inequality, more local inequality
The convergence of emerging markets has reduced income inequality between economies, but income inequality has increased in most economies. This represents a major challenge for the future of globalization.
