NZ Will Be Top Performer in the Developed World in 2050

NZ Will Be Top Performer in the Developed World in 2050, HSBC Report

New Zealand will top the league table of ‘developed countries’ with predictions of GDP growth of 2.9% growth in 2050, according to the newly released HSBC Report The World in 2050. This result for New Zealand outshines predictions for GDP growth of other developed countries including Australia (2.6%), Canada (2.5%), Luxembourg (2.5%) and Switzerland (2.3%).

In addition, New Zealand is expected to have an average rate of growth of 3.1% over the next four decades, meaning that we are the only developed country to be labelled a ‘growth’ country (those with anticipated annual growth of between 3-5% between now and 2050) - the remainder of the developed world is instead labelled with a ‘stable’ outlook.

Paul Bloxham, Chief Economist, HSBC New Zealand says: “New Zealand’s population growth, investment in education, tools and technology will help propel the country to stronger growth. Whereas in comparison, many of the other developed world countries are instead faced with increasing debt problems, a falling taxpayer base and weak demographics – all of which will limit their growth.”

However, the report isn’t all rosy for New Zealand. When it comes to looking at the size of the economy, by 2050 New Zealand will fall 10 places from our current ranking of 50th, to 60th place.

2050 will also bring about a marked shift from West to East as the emerging markets continue to outperform the developed world. China will overtake the US as the largest economy and countries such as the Philippines will rocket 27 places into 16th overall, Peru up 20 places to 26th, Ukraine up 19 places to 40th and Malaysia up 17 places to 21st. In fact, 19 of the top 30 countries in 2050 are currently considered ‘emerging’.

Karen Ward, author of the report and Senior Global Economist for HSBC, says: “Increasingly attention will shift to the new emergers as the world economy undergoes a seismic shift. Over the next four decades it won’t just be BRICs that will be powering global growth; it will be countries as varied as Nigeria, Peru, the Philippines, Malaysia, Ukraine and Chile.”

Despite New Zealand falling even further down the economic league table, it’s not all bad news as our top five trading partners all fall within the top 20 countries in 2050 – including Australia (18th), China (1st), USA (2nd), Japan (4th) and South Korea (13th) highlighting the opportunities that trading with these countries could provide.

“With the growth of the middle classes in emerging markets set to explode, at the same time the demand for commodities will also rocket suggesting that New Zealand is well placed to take advantage of the growth in the world’s fastest growing markets of Asia and Latin America,” concludes Bloxham.