In both 2022 and 2023, the global economy has struggled significantly after record inflation enveloped most countries across the world, followed by central banks hiking interest rates in a bid to curb inflation as economic activity and growth slowed down. This impact was also felt in the largest economies in the world by 2075, even though the U.S., currently the country with the highest GDP in the world, saw a growth rate of 4.9% in Q3 2023, a better than expected performance. Increased consumer spending, higher contribution by exports, residential investment and higher governmental spending all contributed to a better performance by the most advanced country in the world.
Despite the spectacular performance by the U.S., the overall global economic outlook is still not very positive, as the global growth rate was expected to be just 3% in 2023 and 2024, growth lower than even 2022 where it landed at 3.5%. There is still some positivity to focus on, as inflation has fallen worldwide barring a few exceptions and global headline inflation is expected to fall to 6.8% in 2023, down from 8.7% in 2022.
One of the biggest reasons why the global economy is growing at a lower rate than expected earlier is due to the economic slowdown in China, which will be one of the largest economies in the world by 2075. China pursued a zero-Covid policy long after most countries abandoned it and instituted lockdowns for far longer. While the country abandoned this approach towards the end of 2022, the economy has still struggled to return to normalcy, amid a major property crisis. There's a saying that when the United States sneezes, the world catches a cold, signifying its influence on the global economy but China's meteoric rise over the past few decades has seen a similar influence. Many of the biggest countries in the world derive a large percentage of their sales from China, and when governmental officials in the country were banned from using iPhones, Apple Inc. (NASDAQ:AAPL) saw its share price all immediately.
Despite this concern, Apple Inc. (NASDAQ:AAPL) actually saw a much better performance in China in Q3 2023 especially when compared to Q2 2023, which was mentioned in the company's Q3 2023 earnings call, where its CEO Tim Cook stated "If you sort of step around the world, we did exceptionally well in emerging markets last quarter and even better on a constant currency basis. And so emerging markets were — was a strength. If you look at China, in China, we went from a negative 3% in Q2 to a plus 8% in Q3. And so in China, we had an acceleration..... Switchers were a very key part of our iPhone results for the quarter. We did set a record. We set a record in Greater China, in particular, and it was at the heart of our results there. And we continue to try to convince more and more people to switch because of our — the experience and the ecosystem and — that we can offer them. And so I think switching is a huge opportunity for us. In terms of the upgrade cycle and so forth, it’s very difficult to estimate real time what is going on with the upgrade cycle. I would say, if you think about the iPhone results year-over-year, you have to think about the SE announcement in the year ago quarter, the iPhone SE announcement in the year ago quarter. And so that provides a bit of a headwind on the comp. But as Luca said, as he talked about how we’re viewing Q4, the September quarter, we see iPhone accelerating in Q4." However, Apple Inc. (NASDAQ:AAPL) has been caught up in Big Tech entering a market correction and has lost over 2% of its share price in October, though in YTD 2023, it has still increased by 33%.
While most of the countries counted among the largest economies in the world by 2030 will also be among the top 20 economies in the world in 2075, there are still some surprises. One of the biggest surprises is that the U.S. won't even be among the two largest economies in the world by 2075! One of the reasons why the developed world may struggle to grow at a healthy rate is due to lower population growth rates, as the countries with the highest fertility rates are predominantly among developing economies. This is why Emerging Markets boast a much higher growth rate than Developed Markets, and the largest economies in the world in 2050 will be China, the U.S., India, Indonesia and Germany.
It may be startling to learn that the U.S. won't be even among the top two economies in the world by 2075, but it is important to consider that its population is much smaller than China and India for example, with the latter becoming the most populous country in the world in 2023. Additionally, the U.S. has outperformed expectations significantly over the past decade, which is not likely to be repeated anytime in the next 50 years at least, and even the exceptional strength of the U.S. dollar is expected to unwind over the next decade as growth slows down compared to other economies. The growth of emerging markets has also been extremely important for a decrease in global inequality; however, the downside is that inequality within countries has continued to increase.
Methodology
To determine the biggest economies in the world by 2075, we consulted a report developed by Goldman Sachs, which assesses growth rates of each country and ascertains what their GDP will be in 2075. As we mentioned earlier, there are likely to be a few surprises, so let's take a look at the global superpowers, or those expected to be, by 2075.
Expected GDP in 2075 (in $ trillion): 3.3
Power cuts have impacted South Africa's economy, but it has beaten forecasts in Q2 2023.
Expected GDP in 2075 (in $ trillion): 3.4
South Korea has developed into an economic powerhouse in the last several decades, and is expected to remain among the biggest economies in the world by 2075.
Expected GDP in 2075 (in $ trillion): 3.5
Malaysia has established itself as a hub for East Asia regional activities, but posted its weakest GDP growth in almost two years because of a slump in exports.
Expected GDP in 2075 (in $ trillion): 3.8
Concerns regarding Italy's long term growths have persisted for a while now, and the country's central bank governor has urged the country's head to heed investors' debt fears.
Expected GDP in 2075 (in $ trillion): 4.3
An aging population and lower birth rates are the biggest contributors to the country's growth rate falling, and high underlying inflation is expected to impact the country's growth in the immediate future.
Expected GDP in 2075 (in $ trillion): 5.2
In September 2023, Turkey increased inflation rates and lowered economic growth expectations, as the country has struggled to cope with high inflation and currency depreciation.
Expected GDP in 2075 (in $ trillion): 5.2
Currently, Canada does not look like a nation expected to be among the largest economies in the world by 2o75, as the domestic economy has weakened while its currency has continued to depreciate. Recently, the Bank of Canada decided to hold rates while admitting that inflationary risks were increasing in the country.
Expected GDP in 2075 (in $ trillion): 6.1
The oil rich nation has one of the highest GDP per capita in the world, which has already accorded it influence on the global stage. In 2022, Saudi Arabia managed a growth rate of 8.7% and has continued to increase spending, though the biggest challenge for the country is to oil-proof its future.
Expected GDP in 2075 (in $ trillion): 6.2
Ethiopia has been mired in a civil war which has cost tens of thousands of lives and led to major instability in the country. However, the potential for growth in the country is huge, with the next decade likely defining how much Ethiopia can expect to progress in the next half century.
Expected GDP in 2075 (in $ trillion): 6.3
Bangladesh is home to one of the most densely populated cities in the world in Dhaka. While S&P expected the country to continue to grow at around 6.4% annually from 2024 to 2026, liquidity risks led to S&P changing the outlook of the country to negative.
Expected GDP in 2075 (in $ trillion): 6.5
France was the fourth largest economy in the world in 1980, but has continued to slide down the rankings. Even in 2022, it had already fallen to 7th place and a slow growth rate combined with low birth rate means that the economic slide will continue well into the future.
Expected GDP in 2075 (in $ trillion): 6.6
Philippines is expected to maintain a growth rate of nearly 5% from 2030 to 2039, which will allow it to surpass even top European economies such as France in the longer term.
Expected GDP in 2075 (in $ trillion): 6.9
Russia significantly underperformed Goldman Sach's expectations in the last decade and is likely to slide further as a result of its invasion of Ukraine combined with heavy sanctions from Western nations. Currently the 9th largest economy in the world, these issues, unless mostly reversed in the next few years, will see the country slide to 13th position among the biggest global economies in 2075.
Expected GDP in 2075 (in $ trillion): 7.5
Japan has managed to recover output lost during the Covid-19 pandemic and according to Deloitte, its economy is now likely to slow down which will allow the nation to maintain its monetary policy at least into 2024.
Expected GDP in 2075 (in $ trillion): 7.6
According to the IMF, Mexico is currently undergoing a broad-based expansion, with growth expected to be at 3.2% in 2023. The construction, auto production and service sectors will drive higher growth in one of the largest economies in the world by 2075.
Expected GDP in 2075 (in $ trillion): 7.6
The United Kingdom has faced severe economic pressure in the last couple of years, not helped by political instability in the country. The increased cost of living and energy crisis has further added to economies woes, but over the longer term, the UK is expected to maintain its reputation as one of the most influential countries in the world.
Expected GDP in 2075 (in $ trillion): 8.1
Germany is the biggest economy in Europe, and its real GDP growth projections will be around the 1% for each of the next several decades.
Expected GDP in 2075 (in $ trillion): 8.7
Brazil is currently the biggest economy in Latin America, and will hold on to that position for the foreseeable future. Brazil has demonstrated particularly weak performance in the past 10 - 15 years which is why it's not higher in our list but most of the underperformance is expected to be reversed, at least partially, in the next several years.
Expected GDP in 2075 (in $ trillion): 10.4
To become one of the biggest economies in the world by 2075, Egypt will need proper institutions and policies, and needs a big increase in stability. The lack of stability meant that Egypt underperformed earlier forecasts of growth from 2010 to 2019 by 2%, and will underperform 2011 predictions by 1.4% in 2020 - 2029 too.
Expected GDP in 2075 (in $ trillion): 12.3
For Pakistan to have a GDP of over $12 trillion in 2075, from a GDP of $0.1 trillion in 2022, will require a fundamental change in mindset and policies, starting with the establishment of industries and production of goods locally to boost its currency, which has depreciated by nearly 100% in less than 3 years.
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Disclosure: None. 25 largest economies in the world by 2075 is originally published at Insider Monkey.
