China will become the world's top economy in dollar terms in 2030, two years later than forecast in last year's World Economic League Table report. It expects China's economy to grow 5.7 per cent annually from 2020 to 2025, then by 4.7 per cent per year between 2025 and 2030 and 3.8 per cent annually in the 2030-2035 period.

The pace of the recovery is much stronger and there is ‘substantially more momentum’ going into 2022 than CEBR had previously envisaged, it said.

The report showed Germany was on track to overtake Japan in terms of economic output in 2033. Russia could become part of the top 10 economy list by 2036 and Indonesia looks on track for ninth place in 2034.

“The key question is whether inflation will largely subside of its own accord, with a modest degree of policy tightening and possibly a medium-sized fall in asset prices (of about 10 per cent to 15 per cent) but little impact on GDP, or whether bringing it down it will require something close to austerity,” CEBR was quoted as saying by global newswires.

The consultancy expects the push for greener economy and renewable and cleaner energy capacity boost to shrink consumer spending by about $2tn a year on average through 2036, as companies pass on the cost of decarbonising investments to consumers.

“It is probably prudent to conclude that the drive for net zero will at least initially add to consumers’ costs,” the CEBR said.

“If we assume that roughly half of the total cost of decarbonising investment is passed on to consumers, this would suggest that real consumer expenditure will be reduced by about $2tn per annum on average over the next 20 years,” it added.

Fibre2Fashion News Desk (DS)