China will overtake the U.S. to become the world’s biggest economy by 2028, a full five years earlier than previously forecast, due to the Covid-19 pandemic, an economic forecast predicts.
The Centre for Economics and Business Research (CEBR), a UK-based think tank, said in its annual World Economic League Table released on Saturday that one of the impacts of the global health crisis as been “to redistribute economic momentum with Asia doing best and Europe worst”.
China’s “skilful management of the pandemic” and the long-term impact the pandemic will have on Western growth means China’s “relative performance has improved.” The report continues: “We now think that the Chinese economy in dollar terms will overtake the U.S. economy in 2028, five years earlier than we thought last year,” the report states, adding, “Mismanagement of the pandemic by much of the world, particularly, the U.S., will have dire economic consequences that will be felt for years.”
It notes for instance that Chinese authorities reacted “vigorously” to the Covid-19 crisis, thus inflicting less damage on the economy. As a result, while most Western economies are expected to register negative growth for the year, China is forecast to record a two per cent growth rate.
It is then expected to grow by an annual 5.7 per cent between 2021-205 and 4.5 per cent annually from 2026 to 2030 and then 3.9 per cent the following five years.
In contrast, the U.S. is projected to grow by an annual 1.9 per cent from 2022 to 2024 and then by 1.6 per cent following a “strong post-pandemic rebound” next year.
“For some time, an overarching theme of global economics has been the economic and soft power struggle between the United States and China. The Covid-19 pandemic and corresponding economic fallout have certainly tipped this rivalry in China’s favor,” the report says.
The U.S. is the world’s most impacted country having lost more than 420,000 lives to the pandemic and recorded nearly 25 million infections since the beginning of the outbreak, according to a tally by Johns Hopkins University.