PricewaterhouseCoopers has predicted that Saudi Arabia’s economy will grow consistently at an impressive pace and treble to USD 3 trillion by 2050.
The PwC’s biannual The World in 2050 report suggests that the Kingdom will grow by 230 percent to US$1582bn by 2030 and then double in the following 20 years. This phenomenal economic expansion will make it the 18th largest economy in the world. In 2011, Saudi Arabia had the 20th largest economy in the world. The report forecasts the country to achieve an average annual growth of 4 percent over the next 37 years.
Key Highlights from the The World in 2050:
-The world economy is projected to grow at an average rate of just over 3% per annum from 2011 to 2050, doubling in size by 2032 and nearly doubling again by 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
Knight Frank’s ‘The Wealth Report’ had also expected the Saudi economy to become the world’s sixth largest by 2050. Although other Middle East economies are also expected to benefit from high revenues earned through oil and gas exports, they failed to make it to the PwC’s list of top 20 economies. However, another HSBC report, prior to Arab Spring, predicted Egypt’s economy to surpass Saudi Arabia and emerge as the world’s 19th largest economy by 2050.
On the whole, emerging economies are forecasted to outperform developed countries by growing at a healthy rate of 4-6 percent per annum. In comparison, developed economies will only grow at an annual rate of 2 percent. However, the report points out that “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”.
The growth of Saudi economy is limited by its investment, which as a percentage of gross domestic product is expected average 11 percent per year until 2025. This is a significantly lower figure 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).
The economies of China, the US and India are likely to be firmly placed in their positions as the three largest economies in the world by 2050.