World’s largest economies to be emerging countries by 2020

By 2020, three of the world’s five largest economies will be emerging countries, according to the latest predictions from

Euromonitor International. The five markets include China, Russia, India, the US and Japan, with China, Russia and India alone expected to account for 30.4% of global GDP in PPP (Purchasing Power Parity) terms.

Purchasing Power Parity is a measurement of the relative purchasing power of different countries currencies over the same types of goods and services, allowing a more accurate comparison of living standards, according to Euromonitor, who predicts that China will become the worlds largest economy in PPP terms by 2017. China is expected to account for 19.0% of global GDP in PPP terms by 2020, although the country is expected to face increasing challenges from rising labour costs and its ageing population. Additionally, Russia is tipped to overtake Germany as the fifth largest economy in 2016, while the US is expected to lose its position as the worlds number one economy by 2017.

Meanwhile, India’s demographic advantage could see the country become the worlds biggest economy in the coming decades. Euromonitor forecasts that India will have the worlds largest population by 2025, while its working-age population will increase by 11.6% between 2013-2020 compared to -3.1% in China.

Finally, decades of weak economic growth and deflation has led Japan to the brink of a potential debt crisis, especially if foreign debt increases. Like the US, however, it will remain a global technological leader, giving it a competitive edge over its emerging neighbours.