The economy

Showing signs of recovery, the global economy is projected to double in size by 2032 and nearly double again by 2050. China will outstrip the US by 2017 (measured in terms of purchasing power parity). And India is likely to become the third ‘global economic giant’, a long way ahead of Brazil, which we expect to move up to fourth place, ahead of Japan.

As the emerging economies become bigger and wealthier, demand for services is rising. This phenomenon is already shaping global markets: in 2010, emerging economies spent more than the G7 on imported services for the first time since reliable records began.

What this means for your business

These long-term growth trends present many opportunities and challenges. China, India, Brazil and other emerging economies will become large consumer markets, not just low-cost production centres. And, with annual growth projected to be only 2% in the advanced economies, companies will need to look increasingly to other markets.

The booming trade in services is one area that looks particularly promising. Natural resource constraints, such as those relating to energy use and climate change, will also boost demand for new, greener technologies.

But the emerging markets can be difficult places in which to do business. The ability to understand and adapt to local rules and customs will be essential, as will the right entry strategy and, where appropriate, the right partners. Good relations with local government and regulatory bodies will also be crucial. And, in some cases, the best production centres may not be the largest consumer markets.


How we can help


    View our latest Economy research and insights

    The cost of corruption - too big to ignore?

    10 May 2016

    As policymakers convene at the landmark UK anti-corruption summit, we analyse the cost of corruption and the sectors most susceptible.

    How to prioritise public infrastructure investments

    10 May 2016

    The global economy is facing a growth challenge. One often recommended way to boost growth is to accelerate public investment in infrastructure.

    Economic update: Mind the gap

    10 May 2016

    Latest output gap estimates give an indicator of spare capacity, showing that economic output for the G7 was around $500 billion below potential in 2015.

    The co-dependence of governments and the financial sector

    01 Apr 2016

    Subdued growth in some emerging markets and low commodity prices have led to renewed interest in the link between governments and the financial sector.

    ECB announces more cheap loans but what impact will they have?

    01 Apr 2016

    At the March ECB meeting, policymakers announced further expansionary measures to address below target inflation.

    Economic update: What does the new growth target mean for China?

    01 Apr 2016

    At this year’s National People’s Congress, Chinese policymakers set a target range for GDP growth of between 6.5% and 7% for 2016.

    Brazil’s hangover: a slow recovery ahead for Latin America’s former star

    02 Mar 2016

    Once a star of Latin America and the emerging markets, Brazil faces the prospect of a protracted recession.

    Is it time to worry about emerging markets?

    02 Mar 2016

    For much of the last decade advanced economies bore the brunt of the global economic crisis. From the sub-prime crisis and subsequent bank failures, to..

    Economic update: Zero is no longer the lower bound

    01 Mar 2016

    Around one quarter of the global economy in total, have now adopted a negative interest rate policy that is historically unprecedented.

    Tough ask: Three questions to help guide the UK’s export strategy

    12 Feb 2016

    The UK government set tough export targets during 2011 and 2012 to: increase exports to £1 trillion by 2020; and increase the number of exporters by 100,000 to 288,000 by 2020.