PwC predicts UK growth to be best in G7 until 2050

Brexit notwithstanding, the UK is projected to see the greatest growth of any G7 nation between now and 2050, according to the latest report on long-term global growth projections from PwC, the world's second-largest professional services firm.The report, which looks at 32 of the largest economies in the world, which account for about 85 per cent of global GDP, predicts that the world economy could more than double by 2050 – far outstripping population growth – due to continued technology-driven productivity improvements.

Emerging market economies predicted to surge past advanced G7 economies

Emerging markets could grow around twice as fast as advanced G7 economies, with six of the seven largest economies in the world forecast to be emerging economies by 2050, led by China in first place, followed by India and Indonesia. The US is projected to be down to third place, while the EU's remaining 27 members are predicted to lose 10 per cent of their share of global GDP.The UK is expected to be down one place to tenth in the global rankings, but, with annual growth at an expected 1.9 per cent, it will exceed that of the likes of Germany, France and Italy.

UK growth will rely on remaining open to foreign talent

However, John Hawksworth, PwC chief economist, said the growth projection – which took into account "some medium-term drag" resulting from Britain's exit from the European Union – depended on the UK's remaining open to talent from across the world."Our relatively positive long-term growth projection for the UK is due to favourable demographic factors and a relatively flexible economy by European standards," Mr Hawksworth said. "However, developing successful trade and investment links with faster-growing emerging economies will be critical to achieving this, offsetting probable weaker trade links with the EU after Brexit."

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Mexico, Turkey & Vietnam: emerging economies must invest in infrastructure

The report says that, although advanced economies in Europe could be overtaken (ousting France from the top ten and Italy out of the top 20) by faster-growing emerging economies such as Mexico, Turkey and Vietnam, PwC warns that the emerging economies "need to enhance their institutions and their infrastructure significantly if they are to realise their long-term growth potential".

Challenges for government policy-makers

PwC's analysis also identifies a number of key challenges for policy-makers, including:

• A need to avoid a slide back into protectionism, which history suggests would be bad for global growth in the long run
• Ensuring that the potential benefits of globalisation are shared more equally across society
• Developing new green technologies to ensure that long-term global growth is environmentally sustainable

"We project that the world economy could more than double in size by 2050, assuming broadly growth-friendly policies (including no sustained long-term retreat into protectionism) and no major global civilisation-threatening catastrophes," John Hawksworth said.PwC added, "As emerging markets mature, they will become less attractive as low cost manufacturing bases but more attractive as consumer and business-to-business markets. But international companies need strategies that are flexible enough to adapt to local customer preferences and rapidly evolving local market dynamics."Since emerging markets can be volatile, international investors also need to be patient enough to ride out the short-term economic and political cycles in these countries."Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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