UK ‘could out-per­form the rest of G7 by 2050’

Belfast Telegraph - Business Telegraph - - Business Advisory - BY JOHN MUL­GREW

THE UK could be­come the fastest grow­ing econ­omy out of the G7 na­tions by 2050, ac­cord­ing to new re­search to­day.

Busi­ness ad­vi­sory firm PWC said the UK could boast av­er­age an­nual growth of 1.9%.

The UK’S long-term eco­nomic growth could out­pace EU coun­tries like Ger­many, France and Italy, de­spite some medium-term drag from Brexit.

That’s ac­cord­ing to Pwc’s The World in 2050 re­port. How­ever, glob­ally, the UK is likely to be over­taken by other na­tions in terms of over­all growth.

PWC pre­dicts the UK will have fallen by just one place, from 9th to 10th in global econ­omy rank­ings.

With po­ten­tial av­er­age an­nual growth of around 1.9%, the UK is pro­jected to re­main the fastest grow­ing econ­omy in the G7 between 2016 and 2050. Ac­cord­ing to PWC, the UK po­si­tion is “sus­tained by its pro­jected larger work­ing-age share of the pop­u­la­tion than in most other ad­vanced economies”.

But it has warned that the strong growth po­ten­tial de­pends on the UK con­tin­u­ing to at­tract and em­ploy tal­ented peo­ple from around the world, fol­low­ing Brexit. John Hawksworth, chief econ- omist at PWC, said: “Af­ter a year of ma­jor po­lit­i­cal shocks, in­clud­ing the EU ref­er­en­dum and the elec­tion of Pres­i­dent Trump, it might seem brave to of­fer eco­nomic prospects for 2017, let alone 2050.

“But a long-term view is cru­cial for plan­ning for is­sues like pen­sions, health­care, en­ergy and cli­mate change, hous­ing, trans­port and other in­fra­struc­ture in­vest­ment. By look­ing beyond un­pre­dictable short-term eco­nomic and po­lit­i­cal cy­cles and fo­cus­ing on fun­da­men­tals, long-term growth pro­jec­tions can ac­tu­ally be more re­li­able than short-term fore­casts.

“Our rel­a­tively pos­i­tive longterm growth pro­jec­tion for the UK re­flects favourable de­mo­graphic fac­tors and a rel­a­tively flex­i­ble econ­omy, even by Euro­pean stan­dards.

“How­ever, de­vel­op­ing suc­cess­ful trade and in­vest­ment links with faster-grow­ing emerg­ing economies and re­cruit­ing work­force tal­ent wher­ever in the world it can be found, are es­sen­tial to achiev­ing this growth and to off­set prob­a­ble weaker trade links with the EU af­ter Brexit.”

PWC also says that re­gard­less of the out­come of the EU ref­er­en­dum, emerg­ing economies are go­ing to be­come dom­i­nant global eco­nomic forces, eclips­ing many EU mem­bers.

China has al­ready over­taken the USA to be­come the world’s largest econ­omy, and will move fur­ther ahead by 2050.

In­dia cur­rently sits in third place and is pro­jected to over­take the US by 2050. PWC has also pro­jected that the world econ­omy will dou­ble in size by 2042, grow­ing at an av­er­age an­nual rate of just over 2.5% between 2016 and 2050.

Mr John Hawksworth said: “Age­ing pop­u­la­tions and cli­mate change re­quire for­ward-think­ing poli­cies, which equip the work­force to con­tinue to make so­ci­etal con­tri­bu­tions later on in life and pro­mote sus­tain­able devel­op­ment.

“Fall­ing global trade growth, ris­ing in­equal­ity and in­creas­ing global un­cer­tain­ties are in­ten­si­fy­ing the need to cre­ate di­ver­si­fied economies that of­fer op­por­tu­ni­ties for ev­ery­one in a broad va­ri­ety of in­dus­tries.

“Emerg­ing economies of­fer great op­por­tu­ni­ties for busi­ness and the fore­casts in our re­port make it clear that fail­ure to en­gage with these mar­kets means miss­ing out on the bulk of the eco­nomic growth we ex­pect to see in the world econ­omy between now and 2050.”

Economies such as Brazil, China, In­dia, In­done­sia, Mex­ico, Rus­sia and Tur­key are fore­cast to grow at an an­nual av­er­age rate of 3.5% over the next 34 years, com­pared to an av­er­age of just 1.6% for the ad­vanced G7 na­tions.

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