The Philippines has a good chance of emerging as one of the major economies in the world if it sustains its rapid growth over the next 35 years, global consulting firm PricewaterhouseCoopers (PwC) said in a report.
In the latest update to its “World in 2050” report, PwC said the country could jump to the 26th rank by 2030 from its 28th position in 2014, before climbing to the 20th spot by 2050.
The Philippines is regarded at present as a fast-rising economy in the global gross domestic product (GDP) rankings for the long term, reflecting relatively high average growth rates of about 4.5 percent to 5.5 percent per annum as projected over the period, the paper said.
The PwC report sees the Philippines becoming one of the emerging Asian countries that will benefit from the slowdown in China’s economy.
“Chinese growth could slow somewhat more than expected as it reorients from export-led to domestic-led growth. But after around 2018, growth could get back on track both in China and in emerging Asia more generally, in part because China will be pushing its productive capacity into other lower cost places like Vietnam, Indonesia, the Philippines and maybe also Myanmar,” it said.
PwC said its longer-term trend growth estimates for the countries are driven by the following key factors: growth in the labor force of working age (based on the latest United Nations population projections); increases in human capital, proxied here by average education levels across the adult population; growth in the physical capital stock, which is driven by capital investment net of depreciation; and total factor productivity growth, which is driven by technological progress and catching up by lower income countries with richer ones by making use of their technologies and processes.
The world economy will grow at an average of just over 3 percent per annum in the period 2014 to 2050, doubling in size by 2037 and nearly tripling by 2050, it said.
The global economic power shift away from the established advanced economies in North America, Western Europe, and Japan, it said, will continue over the next 35 years despite a projected slowdown in Chinese growth after around 2020.
PwC predicts China will clearly become the largest economy by 2030, dislodging the United States, while India could challenge the United States at second place by 2050.
Indonesia, Mexico, and Nigeria are seen pushing the United Kingdom and France out of the top 10. In fact, the report said, in global GDP ranking in purchasing power parity (PPP) terms, China has already overtaken the US in 2014.
Other countries in Southeast Asia mentioned in the report were Indonesia, in 9th place; Thailand at No. 21, and Malaysia at No. 27.
“Our analysis suggests that this group of 32 countries should have a high probability of including at least the largest 25 economies in the world, looking ahead to the middle of this century,” it said.
“We cannot say, however, that they will necessarily be the largest 32 economies bearing in mind the considerable uncertainties that come with any such long-term projections. There could be some other fast-rising economies that overtake some of this group.”
These projections by PwC assume, however, that emerging markets will follow broadly growth-friendly policies, said the report.
“In practice, not all may do so and, therefore, not all of these economies will fulfill the potential indicated by the PwC growth projections, although some could also exceed the projections if they can accelerate their investment rates and institutional reforms,” it concluded.