JEDDAH – Saudi Arabia's economy will more than treble to $3 trillion by 2050, making it the 18th largest economy in the world, according to analyst PricewaterhouseCoopers in its biannual “The World in 2050” report. It forecast that the Kingdom will grow by 230 percent to $1582 billion by 2030 before doubling in the following 20 years, PwC's biannual The World in 2050 report says. Saudi Arabia had the 20th largest economy in 2011, but PwC expects the country to record an average annual growth of 4 percent over the next 37 years, making it the seventh fastest growing market worldwide. Saudi's growth prospects are limited by its investment, which as a percentage of gross domestic product is expected to be an average of 11 percent per year until 2025, significantly lower than other economies such as Indonesia (28 percent), France (24 percent), Germany (22 percent), Russia (20 percent), Brazil (19 percent) and the UK (17 percent), it added. The world economy is projected to grow at an average rate of just over 3 percent per annum from 2011 to 2050, doubling in size by 2032 and nearly doubling again by 2050. By all accounts, in 2050, China, the US and India are likely to be by far the three largest economies in the world. PwC said China will expand to $53,856 billion, while the US economy will increase to $37,998 billion and India will leap from $4531 billion in 2011 to $34,704 billion in 2050. China is projected to overtake the US as the largest economy by 2017 in purchasing power parity (PPP) terms and by 2027 in market exchange rate terms. India should become the third ‘global economic giant' by 2050, a long way ahead of Brazil, which we expect to move up to 4th place ahead of Japan. Russia could overtake Germany to become the largest European economy before 2020 in PPP terms and by around 2035 at market exchange rates. Emerging economies such as Mexico and Indonesia could be larger than the UK and France by 2050, and Turkey larger than Italy. Outside the G20, Vietnam, Malaysia and Nigeria all have strong long-term growth potential, while Poland should comfortably outpace the large Western European economies for the next couple of decades. However, the PwC report contradicts other forecasts. In 2011, prior to the Arab Spring, HSBC said Egypt would surpass Saudi Arabia and emerge as the world's 19th largest economy by 2050. It estimated Egypt's economy would reach $117 billion, outstripping Saudi Arabia's $113 billion. A Citibank report also published in 2011 predicted Saudi's economy to expand more rapidly and become the sixth largest in the world by 2050. Other Middle East economies, including Egypt and Iran, were not included in the top 20 forecast despite oil and gas creating flows of cash in numerous areas. The report further said emerging economies will outperform developed countries, growing by 4-6 percent compared to an average 2 percent. “However, even in 2050 average income per capita will still be significantly higher in the advanced economies than in the emerging economies – the current income gap is just too large to bridge fully over this period,” it noted. — SG
