A research paper published by Goldman Sachs on Tuesday projected Pakistan to be the world’s sixth-largest economy by 2075, given “appropriate policies and institutions.”
Written by economists Kevin Daly and Tadas Gedminas and titled ‘The Road to 2075’, the paper projected that the five largest economies by 2075 will be China, India, the US, Indonesia and Nigeria.
Goldman Sachs has been projecting countries’ long-term growth for nearly two decades, initially starting with the BRIC economies, but over the past 10 years has expanded those projections to cover 70 emerging and developed economies.
His latest article covers 104 countries with projections going as far as 2075.
Pakistan’s future star status is predicted on the basis of its population growth, which along with Egypt and Nigeria, could put it among the world’s largest economies in the next 50 years, according to Goldman Sachs.
By that time, the research projects that Pakistan’s real GDP will have grown to $12.7 trillion and its GDP per capita to $27,100.
However, these numbers are projected to be less than a third the size of China, India and the US. India’s real GDP in 2075 is projected at $52.5 trillion and GDP per capita at $31,300.
Among the key risks to their projections, the economists single out “environmental catastrophe” and “populist nationalism” in particular.
Unless a path to sustainable growth is secured through a globally coordinated response, climate change could significantly skew these projections, particularly for countries like Pakistan whose geography is particularly vulnerable.
With the rise to power of populist nationalists in many countries, the report says it could lead to greater protectionism that could result in the reversal of globalization, thus increasing income inequality between countries.
Other key projections
Global growth on a declining path
The document notes that world growth has slowed from an average of 3.6 percent a year in the past 10 years to 3.2 percent, and the slowdown has been relatively broad-based.
They project that global growth will average 2.8% between 2024 and 2029 and will be on a gradually decreasing path.
The rise of emerging markets
While global growth is slowing, emerging economies are growing faster than developed markets and will continue to converge with them.
“The weight of world GDP will shift (even) more towards Asia in the next 30 years, countries like China, the US, India, Indonesia and Germany top the ranking of the largest economies when measured in dollars. Nigeria, Pakistan and Egypt could also be among the biggest.”
world population decline
The decline in global growth will be driven by the decline in population growth, which is projected by the UN to fall to near zero by 2075. The paper says this is a “good deal” as it mitigates damage to the environment but it could pose economic problems derived from the high health costs and the aging of the population.
US will not repeat exceptional growth
The United States will not be able to repeat its strong performance of the last decade, with potential growth remaining “significantly lower” than that of the large developing economies.
The US dollar is also expected to lose strength over the next 10 years.
Less global inequality, more local inequality
Emerging convergence has led to a decline in income inequality between economies, but income inequality of markets within most economies has increased. This poses a great challenge for the future of globalization.
