The recent research analysis – The Long View: Scenarios for the World Economy to 2060, by the Organization for Economic Co-operation and Development (OECD) presents a detailed forecast of the world’s economic landscape for the next few decades. It highlights key findings and forecasts relating to global GDP growth rate, prospective changes in the emerging market economies, variations in living standards, institutional reforms, and the roles and perspectives of the BRICS nations.
Shifting Trends in Global Growth
According to the OECD study, the world’s real GDP growth is anticipated to decline from the current 3.5% in 2018 to 2% by the year 2060. Contributing significantly to the world’s economic output will be major emerging market economies such as India, China, and Indonesia, accounting for nearly half of the total global output.
Role of Emerging Market Economies
The research reveals a notable increase in the share of emerging markets in the global GDP by 2060. While China’s contribution is expected to peak at around 27% during the 2030s and dwindle thereafter, India’s share in global GDP continues to rise, surpassing China’s contribution by the mid-2030s.
Causes of a Declining Global GDP
The study attributes the projected decline in global GDP to a declining working-age population, largely due to population ageing. Typically, older people are less likely to be employed than middle-aged individuals, thereby resulting in a decrease in employment rates.
Prospects for Emerging Market Economies
As the world’s economic center of gravity gradually shifts towards Asia, countries located closer to expansive markets like India and China will benefit from easier access to their markets, and consequently become less economically remote.
Living Standards and Institutional Reforms
Rising GDP across countries will continue to improve living standards, gradually aligning them with those of developed nations. However, the BRICS and low-income countries are forecasted to have living standards that remain below, and nearly half as high as that of the USA by 2060. To mitigate this discrepancy, institutional reforms aimed at improving governance quality and educational attainment levels could speed up the convergence of emerging market economies.
The Role of Education
An emphasis on education is crucial, not only for enhancing knowledge and skillsets but also for promoting social participation, job opportunities, awareness of rights, improved health, and poverty reduction.
About OECD
The OECD is an intergovernmental economic organization, established to promote world trade and stimulate economic progress. Headquartered in Paris, France, it boasts 36 high-income member countries with a very high Human Development Index (HDI). While India is not a member, it is a significant economic partner.
OECD Reports and Indices
Some key reports and indices by the OECD include the Government at a Glance 2017 report, International Migration Outlook, and the OECD Better Life Index.
Understanding Emerging Market Economies and BRICS
An emerging market economy refers to a nation’s economy that is progressing towards advanced status. On the other hand, BRICS is an international grouping inclusive of Brazil, Russia, India, China, and South Africa.
