​UK Economy Poised for Remarkable Growth: Outpacing France, Closing in on Germany

​UK Economy Poised for Remarkable Growth: Outpacing France, Closing in on Germany

Posted by Emma on 30th Dec 2023

The UK's economic landscape is undergoing a significant transformation. Forecasts indicate that by 2038, the UK economy will surpass France's by nearly 20% and close in on Germany's economic size. This projection is based on the 2023 World Economic League Table released by the Centre for Economics and Business Research (Cebr).

Maintaining its status as the sixth-largest global economy, the UK is set to be 10.2% larger than France by 2033, with this margin expanding to 19.9% by 2038. Concurrently, the UK's economic gap with Germany, currently one-third larger, is projected to reduce to 28.8%.

Germany's expected economic deceleration is a critical factor in this shift, partially due to its energy dependence on Russia. Despite an anticipated return to growth in 2024, Germany's economic expansion will likely slow, leading to a drop to the fourth-largest economy by 2027, behind Japan and India.

India's economy is particularly noteworthy and is predicted to reach a $10 trillion milestone by 2035. This ascent will likely alter global dynamics, with three superpowers emerging on the world stage. Cebr senior economist Pushpin Singh highlights India's demographic and economic diversity as crucial to its sustained progress.

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Impacted by sanctions following its Ukraine invasion, Russia is poised for a decline in its economic ranking, falling from eighth in 2023 to 14th by 2038. However, these predictions come with a note of caution due to their inherent uncertainty.

Despite current challenges in its property sector, China is on a trajectory to overtake the US as the world's largest economy by 2037. The Cebr anticipates a re-emergence of the US in the 2050s and India's eventual rise to the top in the 2080s.

The global GDP is expected to double from $104 trillion in 2023 to $219 trillion by 2038, with emerging economies playing a significant role in this growth. Countries like Vietnam, Bangladesh, and the Philippines are among the fastest-growing larger economies.

Economists emphasize the ongoing relevance of climate change challenges, predicting serious consequences and associated costs in the latter half of the century. Douglas McWilliams from Cebr points out that the varying pace of Net Zero policy implementation will be a critical factor in economic shifts, with the EU leading the way.

Central banks' policies to counter inflation are showing effectiveness, albeit with a short-term slowdown in global GDP growth, anticipated to be the slowest since 2002 in 2024.

UK Chancellor Jeremy Hunt expresses confidence in the UK's economic trajectory, citing consistent growth since 2010 and policies favouring business investment and tax reductions.

We welcome your thoughts and comments on these economic forecasts and their implications for the global economy. Please share your views below.

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