Page 25 - RPTRusFeb17

3.3 Russia to be biggest Euro economy in 2050
Russia will be the biggest economy in Europe by 2050, consultancy PwC said in a report on February 7 in its latest instalment of “The Long View: How will the global economic order change by 2050.”
This is not the first time the consultant has made this prediction. Russia was well on track to overtake Germany, currently Europe’s biggest economy, much earlier than 2050 until the 2008 crisis struck.
Russia’s economy reached a peak value in dollar terms of $2.3 trillion in 2013 vs Germany’s $3.75 trillion the same year. However, since then Russia’s economy has fallen back to about $1.2 trillion now, about a third the size of Germany’s $3.4 trillion.
Still, Germany’s economy is working close to full capacity whereas Russia’s economy remains well below its full potential. Despite the glacial pace of structural reforms many of Russia’s sectors – mostly the apolitical ones not connected to raw materials – continue to grow fast, which will drive the convergence. And although Russia’s treasure trove of raw materials has often been described as a “curse” as they dissuade the government from making deep changes, the residual income from exports of hydrocarbons and minerals, irrespective of commodity market prices, the extra income gives Russia a huge advantage over its less well-endowed neighbours.
“In 2050, Russia will rise to sixth place in the global list of countries in terms of gross domestic product and will be the first country in Europe in this indicator,” according to PwC’s report .
China is already the world’s largest economy in purchasing power parity (PPP) terms according to International Monetary Fund since 2014 and is well on its way to being number one in nominal terms too before 2050.
India will also push the US from second to third place by 2050, says PwC, which will be ahead of Indonesia and Brazil. Russia will come in sixth place and be the largest economy in Europe. Seventh place is given to Mexico, followed by Japan and Germany, and the top ten will close UK.
PwC forecast takes into account the demographic situation, public investment in infrastructure, education and the dynamics of technological progress in each country. The forecast assumes that the overall situation in the world will favour the economic growth of countries and there will be no serious threats to civilization, global catastrophes (like an asteroid collision with the Earth).
25 RUSSIA Country Report February 2017 www.intellinews.com