India will be number two economy in the world by 2050
Goldman Sachs, the world’s largest investment bank has confirmed the research findings of the BRICs report – that India’s growth will be sustained as predicted, and India could become the second largest economy in the world after
the United States China by 2050! This is according to a TOI report.
What is BRIC?
BRIC stands for four countries – Brazil, Russia, India and China – and it was as far back as 2003 that Goldman Sachs mapped out the GDP growth, per capita income and currency movements for these four countries. But the 2003 BRICs report had given India the number 3 place, but now this has been revised to number 2 just a few days ago in a review by Goldman Sachs.
Reasons why India will rise:
1) Manufacturing productivity will drive growth. It’s performance will improve due to globalisation and increased competition.
2) India’s economic reforms are the reasons for this astounding predicted growth. India’s “increased openness to trade, investment in information and communication technology, and greater financial deepening.”
The fact that the previous chairman of Goldman Sachs Henry Paulson is today the treasury secretary in the Bush administration is also significant.
Some more important points from this report:
1) Growth for BRIC countries will slow at the end of this period.
2) Individuals in the BRIC countries will still be poorer on an average than individuals from the G6 countries, with the exception of Russia. China’s per capita is expected to be $30,000, approximately what it is for the developed nations today.
3) Local spending patterns will change and this will impact the demand and pricing of various commodities and products.
4) Companies who do business globally will benefit.
5) BRICs economies in the next 40 years will be larger than the G6 in US dollar terms! Currently they are worth less than 15%.
6) Russia could overtake UK, Germany, France and Italy.
7) China could overtake Japan, Germany and lastly by 2039 – the US.
8. Of the current G6 countries, only two may remain in the G6 – US and Japan.
If the report is correct, then the BRICs countries will straddle the world in less than 50 years and Europe will be left behind.
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