China and India 'will drive global growth for next 15 years'
Almost 40% of the increase in global GDP in the coming 15 years will come from China (27%) and India (12%), according to a research report from the Economist Intelligence Unit.
Brazil and Russia trail behind, each contributing just over 2% to the increase in world GDP between now and 2020, according to Foresight 2020.
The research is based on new long-term economic forecasts, a survey of more than 1,650 executives and a series of interviews with senior executives.
Other key findings from the study include:
* The US, which will account for 16% of the world's growth, will remain a world leader and will continue to outpace other major developed economies between now and 2020. The US is forecast to grow by almost 3% a year, compared with 2.1% for the EU25 and less than 1% for Japan, whose population will be shrinking.
* The EU will make up for slower growth through territorial expansion, growing to a club of more than 30 countries, but the average income of the expanded EU will be only 56% of the US average in 2020.
* China will have closed the gap in economic size with the US by 2020 and Asia will increase its share of world GDP, measured at purchasing power parity/PPP, from 35% in 2005 to 43% in 2020.
Lower-cost economies will still enjoy a massive wage advantage over developed markets, according to the report. In China's case, the average wage - at 5% of US and EU15 levels in 2005 - will rise to about 15% of the developed-country average in 2020.
Labour-intensive production processes will continue to shift to these markets, although the report adds that fears of the death of Western manufacturing are premature.
