Tuesday, December 31, 2013

CEBR Projections: China's Ascent to Largest Economy Postponed Until 2028 at Least

America's economy will stay atop the world for at least another 14 years.

A new study says China won't eclipse the U.S. economy until 2028, much later than some analysts have suggested.

According to the London-based economic consultancy, the Centre for Economics and Business Research, China's rise to the world's number one economy will be much slower than previously thought, due to both strength in the U.S. economy and the relative slowdown in China's domestic economy.

"China's spectacular economic development has continued and although the increasing maturity of its economy and relatively unfavorable demographics mean that growth will inevitably slow, we still expect China to overtake the U.S. to become the world's largest economy in 2028 for the first time since 1890...This is later than some analysts have suggested," the CEBR analysts added.

According to CEBR, China's gross domestic product will grow to $33,513 billion in 2028, up from $8,939 billion in 2013.

India, meanwhile, is set to become the world's number three economy by 2028, overtaking Japan much sooner than the CEBR had previously expected.

CEBR said Japan's position in the league table had been affected by its weakening currency, which has declined roughly 20 percent against the dollar this year, and is likely to bring Japan's position down in gross domestic product terms value.

"In addition [to the weak yen] Japan's demographics are uniquely unfavorable and the combination leads to Japan losing its position as the world's third largest economy to India in 2028," added the CEBR analysts.

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