China’s Covid-19 success means it will overtake US economy by 2028: think tank
- The Covid-19 pandemic and corresponding economic fallout have tipped the US-China rivalry in Beijing’s favour, says the Centre for Economics and Business Research
- Japan will remain the world’s third-biggest economy, in dollar terms, until the early 2030s when it will be overtaken by India, think tank says
“The Covid-19 pandemic and corresponding economic fallout have certainly tipped this rivalry in China’s favour.”
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The CEBR said China’s “skilful management of the pandemic”, with its strict early lockdown, and hits to long-term growth in the West meant China’s relative economic performance had improved.
China looked set for average economic growth of 5.7 per cent a year from 2021-25 before slowing to 4.5 per cent a year from 2026 to 2030.
While the US was likely to have a strong post-pandemic rebound in 2021, its growth would slow to 1.9 per cent a year between 2022 and 2024, and then to 1.6 per cent after that.
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It also said the pandemic’s impact on the global economy was likely to show up in higher inflation, not slower growth.
“We see an economic cycle with rising interest rates in the mid-2020s,” it said, posing a challenge for governments which have borrowed massively to fund their response to the Covid-19 crisis.
“But the underlying trends that have been accelerated by this point to a greener and more tech-based world as we move into the 2030s.”