Goldman Sachs is one of the world’s premier banks and investment companies. Such institutions are notably conservative in how they see the world’s economic engines. That was why I also fell out of my seat when I saw this headline: “China And India Will Overtake U.S. Economically By 2075, Goldman Sachs Economists Say.“
That’s good news for China and India but flabbergasting for Americans. How is it possible? Here is how Forbes summarizes the report:
The United States’ long-standing economic “exceptionalism” will fade as the 21st century wears on, Goldman Sachs economists predicted Tuesday in a wide-sweeping outlook for the global economy, which also outlined the greatest threats to growth worldwide.
Goldman predicts the top 5 economic lineup as follows:
3. United States
Japan will fall to 12th from 3rd; the U.K. will drop from sixth to tenth and Germany from fourth to ninth.
As I studied the article, I looked for what the two groups, those who will rise and those who will decline, have in common. My conclusion was that the five nations anticipated to lead in 2075 have big, no make that huge, populations. The countries expected to fade have declining populations.
Japan is an example of a population collapse. The East Asia Forum describes Japan’s population decline this way:
Breaking its own record every year for the last 10 years, the country experienced another record population loss of 644,000 in 2020–2021. The population is projected to shrink well into the middle of this century, dropping to an estimated 88 million in 2065 — a 30 per cent decline in 45 years.Will Japan’s population shrink or swim?, Noriko Tsuya, East Asia Forum, October 26, 2022
And it’s not just Japan. According to the article, the U.S. experienced its lowest rate of population growth in the country’s history (+0.1%). Nearly all developed countries are experiencing population loss.
What is odd about all of this, at least to me, is that overpopulation has long been considered a weakness (think Thomas Malthus). The more people you have, the harder it is to feed them.
Yet, Goldman Sachs sees population as necessary in having a dominating G.D.P. in the year 2075.
I was so intrigued by the prediction that I decided to look back at what the world looked like 53 years ago, in 1969.
As you can see, much of the chart is unchanged since 1969 except for the rise of China and India. China was strictly Communist in 1969 and was not trading with the west. India had only been an independen country for 22 years. A prediction that included China as the number 2 economy would have been hard to believe at that time.
Currently, Nigeria is number 28, and Indonesia is number 16 worldwide. If China could go from nowhere to number 2, it is possible for Nigeria and Indonesia to make the leap.
So many things can happen that it is hard to believe anyone can predict the future with a degree of certainty. Yet, the Goldman Sachs prediction gives us a lot to think about. And if you are from the U.S., Germany, France, or Japan, there is much to worry about.