Publiceret: 04.05.2017Af Peter G. H. Madsen mail
If the world's 25 largest economies were to compete in a world cup in growth, India and China would be the undisputed winners while Egypt, Pakistan and Indonesia would follow closely behind.
This is the conclusion to be drawn from an analysis of the growth of the 25 largest economies looking towards 2025 published by the Confederation of Danish Industry (DI).
The significant increase in growth in the five countries runs counter to developments in large parts of the rest of the world.
In 2016, the growth rate of the global economy was at its slowest since the financial crisis. And although growth can be expected to pick up in 2017 and 2018, the difference in growth rates between the emerging economies and the rest of the world will be significant.
Developments in the global economy have consequences for Denmark and the 775,000 Danes whose jobs depend on exports, says Deputy Director of the Confederation of Danish Industry, Kent Damsgaard.
"It is important that Danish companies focus on how they can take advantage of the major opportunities for exports and sales in the rapidly growing economies. Extra effort is often required to get a foot in the door, but in return, there is major potential for sales and growth in the coming years,” he says.
This is especially true in India, which is expected to have the highest growth over the next ten years with a growth rate of almost 7 per cent a year. Number two is China with a growth rate of just under 6 per cent, while Pakistan, Egypt and Indonesia follow immediately behind.
Read the entire analysis here (in Danish)
The higher growth in emerging economies has already meant that the countries constitute an increasing share of the global economy. China in particular has significantly increased its share of the global economy over the past 10-20 years. While China only made up 3.6 per cent of the global economy in 2001, the country now constitutes 15 per cent.
Meanwhile, there are many more wealthy individuals in China. According to the Hurun Global Rich List, there are currently 568 US dollar billionaires in China, which is more than in the United States.
And if you look at the richest 20 per cent of Chinese citizens, a figure which constitutes 275 million people, they have an average purchasing power on par with Southern Europeans.
According to Kent Damsgaard, this highlights the fact that even in countries where average income is relatively low, there may be great opportunities for Danish companies.
“Many high quality products with accordingly high prices will probably still be easier to sell in high-income countries. But there is no doubt that if Danish businesses can partake in the success of the emerging economies, there is potential for bringing in orders and creating more growth and increased employment in Danish export companies,” he says.
Kent Damsgaard notes that in order for the emerging economies to fulfil their growth potential, it is important that the countries also undergo positive development politically and that there is backing for reforms that support growth and development.
See also: Companies’ exports create 775,000 jobs in Denmark