Pakistan to be 20th biggest economy in 2030, 16th in 2050: PwC

Outpacing Canada, Italy

KARACHI: Pakistan will regale impressive growth rates within three decades, surpassing developed nations like Canada and Italy to become the world’s 16th biggest economy till 2050, forecast a top global consultancy PricewaterhouseCoopers (PwC) in its latest report.

The South Asian country’s economy’s GDP at purchasing power parity (PPP) ranked 24, it would score 20th rank, replacing Thailand by 2030 and till 2050 the country’s economy would make its way to 16th position, replacing the current Spain, PwC’s data showed.

“By 2050, Pakistan and Egypt could overtake Italy and Canada on PPP basis,” the London-based consultancy firm said in the report, titled, “The long view: how will the global economic order change by 2050.”

The consultancy firm published its first ‘World in 2050’ report in March 2006, featuring projections for potential GDP growth for 17 leading economies.

After frequent revisions in its list until 2015, the edition now includes 32 countries – together accounting for around 85 percent of world’s GDP – considering Pakistan as one of the largest emerging markets.

The global second professional service, citing International Monetary Fund’s (IMF) estimates, put Pakistan on the 24th place in 2016 with GDP at PPP of $988 billion. The economy is projected to grow more than three times within the next three decades. PwC projected Pakistan’s GDP on PPP-basis at $1.868 trillion in 2030 and $4.236 trillion in 2050.

The tax consultancy, however, forecast a whopping nine times jump in the country’s GDP at market exchange rates (MER) within three decades. The consultancy logged the country’s GDP at MER of $284 billion in 2016 and projected this at $776 billion in 2030 and $2.831 trillion in 2050.

“The largest movers over the next 35 years are projected to be Nigeria, Vietnam and Pakistan,” it said. “All of these emerging countries tend to benefit from strong population growth; however, their progress will depend on being able to generate enough jobs for the young people in their countries. If they cannot do this, it could be a cause of political instability.”

The consultancy firm said working age group in these world’s major transforming economies would outstrip their total populations.This high growth rate in working age population would be a boon instead of a bane for these economies. Pakistan is one of the countries that would enjoy highest growth because of its increasing size in working age group.

PwC projected an average annual growth in working age population in Pakistan at near two percent, only second highest after Nigeria, throughout 2050.    Pakistan’s average population growth rate would be 1.4 percent, average annual real growth per capita 2.9 percent and average annual GDP growth in domestic currency 4.4 percent over the next 35 years, according to a PwC analysis.

“We project that the world economy will double in size by 2042, growing at an annual average rate of around 2.6 percent between 2016 and 2050,” PwC said. “Global economic growth will be driven by emerging market economies, which will gradually increase their share of world GDP over time.”

The firm further noted a decline in cost of entrepreneurship in Egypt, Nigeria, Pakistan and Vietnam in the past 12 years. A graph showed that cost of starting a business as a percentage of average income per capita dipped to a less than half between 2005 and 2017. 

Surprisingly, the consultancy firm didn’t foresee a noticeable rise in investment to GDP ratio in the next 10 years. It would inch up to 17 percent after 2025 from the current 16 percent, according to its assumptions informed by historical data from IMF. And, a reason might be the humongous economy size in times to come.