In 8 Years, China Will Surpass the US as the World's Largest Economy... Accelerated by 5 Years Due to the Pandemic Impact

[Image source = Yonhap News]

[Asia Economy Reporter Choi Eun-young] Due to the impact of the novel coronavirus infection (COVID-19), it is forecasted that by 2028, China will surpass the United States to become the world's largest economy.

On the 26th (local time), the UK think tank Centre for Economics and Business Research (CEBR) stated in its annual report published that day, "For some time, a key topic in the global economy has been the competition between the US and China over economic and soft power," adding, "In this competitive relationship, the COVID-19 pandemic and its economic aftermath have created a favorable situation for China."

CEBR evaluated that China "skillfully managed the pandemic" thanks to its strong initial lockdown measures against COVID-19. On the other hand, the US suffered damage to its long-term growth, leading to a relative improvement in the Chinese economy, CEBR explained.

CEBR projected that from 2021 to 2025, China will record an average annual economic growth rate of 5.7%, and from 2026 to 2030, an average annual growth rate of 4.5%.

Meanwhile, the US is expected to show a strong economic rebound after COVID-19 in 2021, but from 2022 to 2024, the growth rate will slow to an average of 1.9% annually, and thereafter decline further to 1.6%, according to the forecast.

Furthermore, according to this forecast, China is expected to surpass the US in 2028 to become the world's largest economy. This is five years earlier than the previously anticipated timeline from a year ago.

Meanwhile, Japan is expected to maintain the world's third-largest economy in dollar terms until the early 2030s but will then lose the third place to India. Germany is expected to drop from fourth to fifth place, and the UK, currently fifth, is forecasted to fall to sixth place starting in 2024.

CEBR noted that although the UK economy will be hit next year due to Brexit, as the importance of the digital economy gradually increases, the UK, leading this sector, is expected to have a gross domestic product (GDP) in dollar terms 23% higher than France by 2023.

Regarding the impact of the COVID-19 pandemic, CEBR pointed out, "There may be higher inflation rather than a slowdown in growth rates," adding, "We will witness a cyclical rise in interest rates in the mid-2020s, which will be a test for governments that raised large-scale funds to respond to the COVID-19 crisis."

This content was produced with the assistance of AI translation services.