Discerning a dramatic shift in the world's economic balance of power, a US think tank has projected that by 2050 India would become one of the three largest economies of the world with the US and China.
Growing at a projected rate of 6.19 per cent between 2009 and 2050, India would grow most rapidly among the G-20 group of world's leading economies the making Indian economy 97 per cent as large that of the US in terms of Purchasing Power Parity (PPP), two experts at the Carnegie Endowment for International Peace wrote.
In an article on "The G-20 in 2050", in the November 2009 issue of International Economic Bulletin of the think tank they noted that in dollar terms, India's GDP is expected to increase by 16 times from the current $1.1 trillion to $17.8 trillion by 2050.
"The world's economic balance of power is shifting dramatically," noted experts Uri Dadush, the director of Carnegie's
International Economics Programme and Bennett Stancil a Junior Fellow in the Programme.
By 2050, the United States and Europe, long the traditional leaders of the global economy, will be joined in economic size by emerging markets in Asia and Latin America, they wrote.
China will become the world's largest economy in 2032, and grow to be 20 per cent larger than the United States by 2050, the two experts predicted suggesting "over the next forty years, nearly 60 per cent of G20 economic growth will come from Brazil, China, India, Russia, and Mexico alone."
Over the next 40 years, the G20 GDP is expected to grow at an average annual rate of 3.6 per cent, rising from $38.3 trillion in 2009 to $161.5 trillion in 2050, in real US dollar terms.
Nearly 60 percent of this $123 trillion dollar expansion will come from Brazil, Russia, India, China and Mexico (BRIC+M), Dadush and Stancil projected.
"These five economies will grow at an average rate of 6.1 per cent per year, raising their share of G20 GDP from 18.7 per cent in 2009 to 49.2 per cent in 2050."
China, India, and the United States will emerge as the world's three largest economies in 2050. Their total GDP, in real US dollar terms, will be over 70 per cent more than that of the other G20 countries combined, they said.
In China and India alone, GDP is predicted to increase by nearly $60 trillion-the current world GDP-but the wide disparity in per capita GDP among these three will persist.
Of the G20 countries, India is predicted to grow most rapidly, but its current modest size will prevent it from surpassing either China or the United States in real US dollar terms. India's PPP GDP, however, will be 97 per cent as large as that of the United States by 2050.
A growing population - India is expected to become the world's most populous nation in 2031 - and an average exchange rate appreciation of 0.9 per cent per year will push annual GDP growth to an average of 6.2 percent, the two experts said.
India's US dollar GDP will balloon to $17.8 trillion in 2050, sixteen times its current $1.1 trillion level, Dadush and Stancil predicted.
Despite impressive GDP growth in the developing world, relative per capita GDP (or wealth) will remain low. By 2050, the five largest economies, in both real US dollar and PPP terms, will include three of the G20's poorest-India, China, and Brazil, they said.
In 2009, by contrast, seven of the G20's largest eight members were among its richest, in US dollar terms.