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Turkey set to be 5th largest economy worldwide

11th January 2019

Turkey set to be 5th largest economy worldwide

Turkey is predicted to be the world’s 5th largest economy in the world by 2030.  These huge changes come due to a young, educated and expanding middle class in these economies.

Turkey is set to be ahead of Germany, Russia and Japan rising to a ranking of 5th largest in the world within 12 years.  China is predicted to be number 1 by 2020.  These figures were supplied by the UK based multinational bank Standard Chartered Plc’s long-term forecasts.

This prediction shows a huge change in the world’s current economic order.  With several emerging markets taking over the top 10 positions.  The UK, Italy and France are not featured within the top 10 places.

India looks to be ahead of the USA sitting at number 2 in the largest economy in the world listings.  Indonesia will be within the top 5 places just above Turkey by 2030.

"India will likely be the main mover, with its trend growth accelerating to 7.8% by the 2020s partly due to ongoing reforms, including the introduction of a national goods and services tax (GST) and the Indian Bankruptcy Code (IBC)," the report said.

Economist’s project that Asia, lead by China will power global growth and its share of the growth will match that of the euro and U.S areas combined reaching 35% by 2030.  China will be number 1 within the next decade but growth will slow by 2030 due to the economy’s size.

"Despite the weaker growth performance of several regions, our premise that EM would account for an increasingly dominant share of world GDP has been well founded," the report commented.

"Instead, Asia saw its share of world GDP rise consistently to 28% as of 2018 from just 2 percent in 2010 and is likely to reach 35% by 2030. Asia's share of world GDP in 2030 will likely match that of the euro zone and the U.S. combined. All other emerging markets are also likely to see their shares of world GDP rise, though at a much more modest rate," the Standard Chartered economist described in detail.

"Our long-term growth forecasts are underpinned by one key principle: countries' share of world GDP should eventually converge with their share of the world's population, driven by the convergence of per capita GDP between advanced and emerging economies," Standard Chartered economists led by David Mann wrote in the report.

Population aging will have a significant effect on the growth in both emerging and developed economies for the next few decades.

"Young labour forces in many EM support stronger potential growth, unlike in developed economies. South Asia and the Middle East still have most of their demographic dividend phase ahead," the Standard Chartered report added. A hyper-aged economy is defined if its population over age 65 exceeds 21% of the total population. "With the main exception of the U.S., many developed countries will be hyper-aged by 2030," the report predicted.

A majority of the world's population will enter the middle-class income group by 2020. This class' growth, fuelled by urbanization and education, will help counter the effects the aging population will have on global growth and many economies, the report adds.

However, it points out that about 100 million new jobs must be created in the manufacturing and service sectors by 2030 to meet the massive employment demand created by such a young demographic.

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