Russian economy can surpass Germany's next year

Russian economy can surpass Germany's next year Photo: pxhere.com

The top 10 world's biggest economies may see significant changes in the near future, according to a report of a British bank. The researchers expect China to overtake the US and become the world's leading economy, while Russia can get to the top five already next year. However, the forecast is based on measuring purchasing power parity, which is an alternative tool that not all economists would use.

Russia can become the world's fifth-largest economy as early as next year surpassing Germany and the UK, says Preston Business Review citing a long-term growth forecast by Standard Chartered, the multinational banking and financial services company based in London. The bank also expects Asian economies to grow significantly in the next decade.

Next year, China is likely to replace the United States as the world's biggest economy. The researchers used a combination of purchasing power parity (POP) exchange rates and nominal gross domestic product (GDP) for their assessments. India, Japan and Russia will follow the leaders in the top five, while the top 10 will include Germany, Indonesia, Brazil, Turkey and the UK. In the longer term, the bank expects Asian economies to show impressive growth in the next decade. By 2030, Asian countries can take seven of the top 10 spots on the list of the world's largest economies.

Standard Chartered considers that China is likely to replace the United States as the world's biggest economy in 2020. Photo: The White House

However, Big Think points out that the tool chosen by the researchers (PPP at GDP) may be inaccurate, as some economists would use market exchange rates instead of PPP. Using simple market exchange rates instead of PPP would most likely change the picture, considers Ben Chu, an economics editor of The Independent. He emphasises that the International Monetary Fund expects the US to be the world's largest economy at least until 2023 with the UK keeping ''a comfortable lead over the likes of Indonesia, Turkey, Brazil, Russia and the rest with little evidence of catchup''.

As for Russia, the World Bank claimed last week that the growth rate of the country's GDP will increase to 1,8% in 2020 and 2021. According to the bank, the Russian economy experienced ''relatively low and stable inflation and increased oil production'' despite the tightened economic sanctions last year. At the same time, Germany showed weaker results in 2018. The growth of Europe's largest economy totalled 1,5%, which has been the slowest rate since 2013, due to a global economic downturn and problems in the local car industry.

By Anna Litvina