US$3 trillion estimate will make it the 18th largest economy in the world - analysts
Saudi Arabia’s economy will more than treble to US$3 trillion by 2050, making it the 18th largest economy in the world, according to analyst PricewaterhouseCoopers.
The oil-rich gulf state will grow by 230 percent to US$1582bn by 2030 before doubling in the following 20 years, PwC’s biannual The World in 2050 report says.
Saudi Arabia had the 20th largest economy in 2011 but PwC expects the country to record an average annual growth of 4 percent over the next 37 years, making it the seventh fastest growing market worldwide.
Other Middle East economies, including Egypt and Iran, were not included in the top 20 forecast despite oil and gas creating flows of cash in numerous areas.
The report says emerging economies will outperform developed countries, growing by 4-6 percent compared to an average 2 percent.
“However, 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 report says.
Saudi’s growth prospects are limited by its investment, which as a percentage of gross domestic product is expected to be an average of 11 percent per year until 2025, significantly lower 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).
However, the PwC report contradicts other forecasts.
In 2011, prior to the Arab Spring, HSBC said Egypt would surpass Saudi Arabia and emerge as the world's 19th largest economy by 2050. It estimated Egypt's economy would reach US$117bn, outstripping Saudi Arabia's $113bn.
A Citibank report also published in 2011 predicted Saudi's economy to expand more rapidly and become the sixth largest in the world by 2050.
By all accounts, in 2050, China, the US and India are likely to be by far the three largest economies in the world.
PwC says China will expand to US$ 53,856bn, while the US economy will increase to US$37,998bn and India will leap from US$4531bn in 2011 to US$34,704bn in 2050.