The G20 in 2050

By 2050, emerging countries in Asia and Latin America are expected to become economic powers comparable to the United States and Europe, dramatically shifting the world’s balance of power.
Related Topics
Related Media and Tools

A more complete description of the following model and its results can be found in the Carnegie Policy Outlook entitled "The World Order in 2050."

The world’s economic balance of power is shifting dramatically. 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. China will become the world’s largest economy in 2032, and grow to be 20 percent larger than the United States by 2050. Over the next forty years, nearly 60 percent of G20 economic growth will come from Brazil, China, India, Russia, and Mexico alone. However, these emerging markets will not rise among the world’s richest countries in per capita terms: their average income in 2050 will still be 40 percent below that of the G7 states today. The end of the decades-old correlation between economic size and per capita income will have profound effects on global economic governance. The G20’s recent transformation into the world’s principal economic forum highlights the beginning of a more integrated and complex economic era. 

Projected G20 Economic Growth 2009-2050

How to use:
Press play to start the timeline
Change the X or Y axis measures by clicking on the label
Hover over a dot to see a country name
Click on a dot to follow a country over time

Projecting to 2050

GDP projections for the G20 nations (excluding the EU) are derived from assumptions about labor force growth (drawn from U.S. Census data), rates of investment, and speed of technological change. These projections expand on previous studies, including those done by Goldman Sachs, PricewaterhouseCoopers, and the World Bank, by adjusting for initial quality of governance, education, and infrastructure, as well as updating population and investment rate projections.

Estimates through 2014 draw on the latest IMF forecasts, while subsequent projections are derived from a Cobb-Douglas production function. Projections for 2015 to 2025 are weighted by pre-crisis trends; those for 2025 to 2050 come directly from the model.1


Average Annual GDP Growth
Percent Change (y/y)

  Pre-Crisis Trend (1997-2007) Crisis Years (2007-2009) Projections (2009-2050)
Argentina 2.62 2.01 4.09
Australia 3.56 1.54 2.85
Brazil 2.8 2.17 4.16
Canada 3.29 -1.04 2.62
China 9.62 8.76 5.56
France 2.36 -1.03 2.09
Germany 1.56 -2.08 1.44
India 7 6.35 6.19
Indonesia 2.68 5.02 5.01
Italy 1.46 -3.11 1.27
Japan 1.15 -3.07 1.08
Korea 4.3 0.61 2.47
Mexico 3.32 -3.09 4.29
Russia 5.68 -1.19 3.33
Saudi Arabia
3.23 1.75 4.7
South Africa
3.67 0.41 4.28
Turkey 4.05 -2.87 4.33
United Kingdom
2.89 -1.86 2.13
United States
3.01 -1.16 2.7
Source: IMF, author's calculations.

These projections assume that markets stay open, macroeconomic policies remain sound, and catastrophes do not occur. Thus, they provide only an educated assessment of broad developments in the international economy.

Power Shift

Over the next 40 years, the G20 GDP is expected to grow at an average annual rate of 3.6 percent, rising from $38.3 trillion in 2009 to $161.5 trillion in 2050, in real U.S. dollar terms. Nearly 60 percent of this $123 trillion dollar expansion will come from Brazil, Russia, India, China and Mexico (BRIC+M). These five economies will grow at an average rate of 6.1 percent per year, raising their share of G20 GDP from 18.7 percent in 2009 to 49.2 percent in 2050. By contrast, GDP in the G7 will grow by less than 2.1 percent annually, with their share of G20 GDP declining sharply from 72.3 percent ($27.7 trillion) in 2009 to 40.1 percent ($64.7 trillion) in 2050.

By 2050, emerging countries in Asia and Latin America are expected to become economic powers comparable to the United States and Europe, dramatically shifting the world’s balance of power.

In purchasing power parity (PPP) terms, the shift is even more dramatic. Currently, the G7 claims 54.6 percent of G20 PPP GDP, while the BRIC+M economies account for 34.7 percent. In 2050, the BRIC+M economies will be more than twice as large as the G7 in PPP terms, claiming 60.1 percent of G20 PPP GDP, compared to the G7’s 28.6 percent. Furthermore, the BRIC+M economies will be five of the world’s six largest.

The New Triad

China, India, and the United States will emerge as the world’s three largest economies in 2050. Their total GDP, in real U.S. dollar terms, will be over 70 percent more than that of the other G20 countries combined. 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. 

By 2050, emerging countries in Asia and Latin America are expected to become economic powers comparable to the United States and Europe, dramatically shifting the world’s balance of power.

After nearly a century as the world’s preeminent economic power, the United States is projected to relinquish this title to China in 2032. However, the current size of the U.S. economy (in 2009, U.S. GDP was nearly four times that of China) and relatively strong annual growth of 2.7 percent will prevent China from severely outpacing it. Consequently, the United States will remain a global leader, though it will undoubtedly be forced to cede some authority to its rising counterpart. Furthermore, the extraordinary per-capita wealth of the United States may actually work against its bid to lead, as the much lower per capita incomes in China and India will be perceived as more representative of the world population, potentially reinforcing their authority.

By 2050, emerging countries in Asia and Latin America are expected to become economic powers comparable to the United States and Europe, dramatically shifting the world’s balance of power.

Rapid annual growth of 5.6 percent and a strengthening currency—the renminbi is predicted to appreciate by more than 1 percent per year against the dollar in real terms—will drive China’s U.S. dollar GDP up from $3.3 trillion in 2009 to $45.6 trillion in 2050. By 2050, China’s economy will be approximately 20 percent larger than that of the United States in real dollar terms and 88 percent larger in PPP terms, even as its labor force shrinks by nearly 18 percent.

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 U.S. dollar terms. India’s PPP GDP, however, will be 97 percent 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 percent per year will push annual GDP growth to an average of 6.2 percent. India’s U.S. dollar GDP will balloon to $17.8 trillion in 2050, sixteen times its current $1.1 trillion level.

To retain their historic influence, European nations will increasingly need to conduct foreign policy under an EU banner.

The next forty years will be a critical period for the EU and its 27 members. Currently, Germany, the UK, France, and Italy are the fourth through seventh largest economies in the world. By 2050, the UK, helped by demographic trends, will be the largest of the four, ranking seventh in the world. Italy will be the smallest, ranking fifteenth. PPP GDP in these four countries will be less than half of that in India and less than one-fourth of that in China.

To retain their historic influence, European nations will increasingly need to conduct foreign policy under an EU banner, a shift implied by their recently ratified constitution. In 2009, the total GDP of the EU will be $14.1 trillion, larger than that of any single country. In 2050, assuming the region follows the 1.5 percent average growth rate of its four largest countries, real U.S. dollar GDP will increase to $25.8 trillion, placing it among the three largest economies in the world. Additionally, if a single EU representative were to replace Europe’s four current G20 members, Europe would not only maintain its influence, but the change would also help transform the G20, which is currently too large, into a more effective international forum.

Russia, once one of the world’s great powers, may become a political outlier under this scenario.  Lacking strong membership in regional coalitions (such as the EU) and soon to be surpassed in size by several other developing countries, it risks becoming marginalized under the new economic order. 

Drivers of Growth

Over the next 40 years, technological advancement and domestic investment will play a critical role in changing the shape of the world economy. Model estimates for these inputs are based on historical evidence, but state action could alter their course and dramatically change the direction of growth.

Despite impressive GDP growth in the developing world, relative per capita GDP will take longer to grow.

In advanced economies, technological progress is expected to provide a steady, but moderate, engine for growth, adding between 1.3 and 1.5 percent to growth per year, according to various estimates. The gradual diffusion of established technologies (e.g., electrification and mechanized road transport), as well as rapid adoption of new technologies (e.g., mobile phones), will provide a much more powerful impetus for growth in developing countries, particularly during the next twenty years.

This growth could be even faster, but the low quality of education, infrastructure, governance, and business climate will hold back progress in developing countries. Technological convergence is expected to be lower in India and Indonesia than in China and Russia.

High domestic investment will also play a critical role, particularly in India and China. As countries develop, investment as a percentage of GDP is expected to rise before beginning to converge to 20 percent, the average yearly investment rate in advanced economies. Investment rates are expected to be higher than 20 percent in China, India, and Indonesia, where comparative advantage will shift from labor-intensive to capital-intensive sectors. By contrast, investment in highly industrialized countries, such as the UK and Germany, is projected to be lower, with technological innovation overwhelmingly underpinning growth there instead.

A Changing Paradigm in Global Economic Governance

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 U.S. dollar and PPP terms, will include three of the G20’s poorest—India, China, and Brazil. In 2009, by contrast, seven of the G20’s largest eight members were among its richest, in U.S. dollar terms.

The strong positive correlation between wealth and size, in real U.S. dollar terms, has been declining since 1990 among the G20 countries. Though it will remain significant through 2020, it is expected to virtually disappear, and turn negative in PPP terms, by 2050.

On an absolute scale, average income in the G20’s ten emerging economies (as defined by the IMF) will rise to only $22,000, less than 60 percent of the average present-day income of the G7 states. When calculated in PPP terms, the average income in emerging markets in 2050 will be slightly larger than that of the G7 in 2009, but still less than half of the G7’s income in 2050.

As low and middle income economies become increasingly powerful, the traditional distinctions between countries will become outdated, raising new questions about global economic leadership.

This dissociation between economic wealth and size will dramatically affect the role and structure of international organizations and financial institutions. As low and middle income economies in Asia and Latin America become increasingly powerful, the traditional distinctions between countries—developed versus developing, creditor versus debtor—will become increasingly outdated, raising new questions about global economic leadership. Will emerging markets’ influence grow with their GDP? Or will inertia keep authority in the hands of the richest and most advanced countries?

With forty years of inscrutable political and economic developments obstructing the view, answers to such questions are difficult to uncover. However, one fact remains certain: the landscape of the global economy is shifting dramatically. International institutions that lack flexibility and representative governance structures will gradually become marginalized. The recent promotion of the G20 over the G8 is just one signal that the power shift has begun.

 Uri Dadush is a senior associate in and the director of Carnegie’s International Economics Program. Bennett Stancil is a Junior Fellow in Carnegie’s International Economics Program.

End of document

About the International Economics Program

The Carnegie International Economics Program monitors and analyzes short- and long-term trends in the global economy, including macroeconomic developments, trade, commodities, and capital flows, drawing out their policy implications. The current focus of the program is the global financial crisis and its related policy issues. The program also examines the ramifications of the rising weight of developing countries in the global economy among other areas of research.


Publication Resources

In Fact



of the Chinese general public

believe their country should share a global leadership role.


of Indian parliamentarians

have criminal cases pending against them.


charter schools in the United States

are linked to Turkey’s Gülen movement.


thousand tons of chemical weapons

are in North Korea’s possession.


of import tariffs

among Chile, Colombia, Mexico, and Peru have been eliminated.


trillion a year

is unaccounted for in official Chinese income statistics.


of GDP in oil-exporting Arab countries

comes from the mining sector.


of Europeans and Turks

are opposed to intervention in Syria.


of Russian exports to China

are hydrocarbons; machinery accounts for less than 1%.


of undiscovered oil

is in the Arctic.


U.S. government shutdowns

occurred between 1976 and 1996.


of Ukrainians

want an “international economic union” with the EU.


million electric bicycles

are used in Chinese cities.


of the world’s energy supply

is consumed by cities.


of today’s oils

require unconventional extraction techniques.


of the world's population

will reside in cities by 2050.


of Syria’s population

is expected to be displaced by the end of 2013.


of the U.S. economy

is consumed by healthcare.


of Brazilian protesters

learned about a massive rally via Facebook or Twitter.


million cases pending

in India’s judicial system.

1 in 3


now needs urgent assistance.


political parties

contested India’s last national elections.


of Egypt's labor force

works in the private sector.


of oil consumed in the United States

is for the transportation sector.


of Chechnya’s pre-1994 population

has fled to different parts of the world.


of oil consumed in China

was from foreign sources in 2012.


billion in goods and services

traded between the United States and China in 2012.


billion in foreign investment and oil revenue

have been lost by Iran because of its nuclear program.


increase in China’s GDP per capita

between 1972 and today.


billion have been spent

to complete the Bushehr nuclear reactor in Iran.


of Iran’s electricity needs

is all the Bushehr nuclear reactor provides.



were imprisoned in Turkey as of August 2012 according to the OSCE.

Stay in the Know

Enter your email address to receive the latest Carnegie analysis in your inbox!

Personal Information
Carnegie Endowment for International Peace
1779 Massachusetts Avenue NW Washington, DC 20036-2103 Phone: 202 483 7600 Fax: 202 483 1840
Please note...

You are leaving the website for the Carnegie-Tsinghua Center for Global Policy and entering a website for another of Carnegie's global centers.