LONDON, The United Kingdom – China will surpass the United States as the world’s largest economy by 2032, the London-based Economic and Business Research Center (CEBR) has pointed out in its annual report which highlighted “renewed volatility and uncertainty” in the economy this year, marked by trade tensions between Washington and Beijing.
The British consultant revealed that the US economy at the moment does not seem to be affected by trade tensions, partly thanks to last year’s tax reforms that have boosted economic growth.
At the same time, the CEBR warned that a “serious problem with the budget deficit” remains that could grow even more over time and leave Washington “with less fiscal margin” in the event of an economic recession.
China “finally seems to be making progress” in 2018, ridding its economy of the large amounts of debt it had sought to boost economic growth after the 2008 financial crisis, analysts at CEBR estimated.
However, according to the report, Beijing now has more problems as a result of the tariff war, so that it will become the largest economy in the world by 2032, two years later than previously estimated.
As for Brazil, analysts expect economic growth of 2.3% in 2019. While Brazil lost the eighth place in the list of the largest global economies in 2018 due to the devaluation of the real, by 2022 the country should be able to regain the seventh place in the countries.
The Chinese daily Global Times questions whether the US will continue to lead the global economy in the future.
According to the author of the article , Washington will not be able to “overshadow other countries in the economy in the long run.” In his view, the concept of “America First” is impossible in the age of globalization.
The US will have to maintain bilateral relations with the major economic powers.
The fact that the US economy is thriving and that other countries need to call Washington for help is only a guess, the journalist says.
“For example, if the US reduces trade with China, they will have to increase trade with other countries and this change is expensive,” he said.
The author noted that US stock indices recorded the highest drop in all trading history on December 24.
He attributed this drop to the lack of confidence in the US economy in 2019, the uncertain future of the trade war with China and the chaotic domestic policy of the US authorities.