International Business Institute predicted Australia's economy to fall in the world rankings during the next years. It also predicted Communist China’s economy to be the world’s number one in 2028.
Spain and Indonesia will overtake Australia which is set to move from 13th place in 2020 to 15th place by 2035 the economists from the Centre for Economics and Business Research said in an annual report published on December 26.
This conclusion is a sharp reversal from last year's prediction of the economists who said Australia would replace Spain as the 13th world's global economy in 2024. Australia economy has contracted severely in 2020 due to the Wuhan virus crisis at estimated 4 per cent a fall which is only comparable with 1 per cent year-on-year decline in 1991.
The economy had a strong performance in the last three decades due to the international demand for foreign resources.
But two main challenges are exposure to harsh climate events and the relation with Communist China. Both are unlikely to improve with an increase of average temperatures and widespread drought causing unusually destructive bush fires, the authors of the forecast stated. China has been a buyer of 40 per cent of Australia's exports, creating significant leverage on Australia's economy.
The economists predicted that Australia's economic growth would pick up to 3.5 per cent in 2021 before falling back to around 2.7 per cent in the following years. Such growth will be nearly equal to New Zealand's GDP of 2.6 per cent at that time.
Communist China’s economy as world’s number one economy in 2028
China will move ahead of the United States to become the world's biggest economy in 2028, five years earlier than previously estimated due to the contrasting recoveries of the two countries, stated US researchers.For some time, an overarching theme of global economics has been the economic and soft power struggle between the United States and Communist China, the Centre's researchres said in an annual report published on December 26.Economists also predicted the ascent of India and Indonesia from 5th to 3rd and from 16th to 11th world biggest economies respectively but their success will not influence the dominant position of the US and Communist China. The analysts admitted that the past year, has been a bad year for the world economy with the weakest GDP growth since the recession year of 2009. But the clouds started to lift towards the end of the year and that expansionary fiscal and monetary policy around the world will cause growth to accelerate in 2020.