LONDON – Britain’s multi-billion pound sex and illegal drug industries have helped the UK leapfrog France to become the world’s fifth largest economy.
The latest global economic league tables includes a £10 billion boost in UK earnings from drugs and sex – which earlier this year led to Brussels issuing a £1.7 billion bill to the Treasury.
New figures from the Centre for Economic and Business Research (CEBR) also forecast that the UK economy will pass Germany’s after 2030, for the first time since 1954, with a declining population identified by researchers as a “likely weakness” for the European industrial powerhouse.
While the Chancellor George Osborne may cite the new rankings as further evidence of the success of his financial strategy, the UK’s jump up the table comes with a caveat – as the French do not include prostitution or narcotics income in gross domestic product (GDP) calculations.
The CEBR survey also forecasts that Britain’s lead economic role in the Commonwealth will soon end. India’s growing economy is on course to overtake the UK within three years, and is expected to become the world’s third largest by 2024.
CEBR chief executive, Douglas McWilliams, pointed to new evidence of “dramatic changes” taking place. He said: “Slow-growing European economies are falling back and Asian economies, even though their growth is slowing, are catching up.”
Although the United States still tops the world’s economic premier league, revisions in the way China calculates its GDP means it is now forecast to overtake the US three years earlier than previously forecast. By 2025, China will hold the number one slot, and by 2030 the top six reads: China, the US, India, Japan, Brazil and the UK.
Vladimir Putin’s Russia, which is currently in economic turmoil, is not forecast to show any immediate recovery. The continuing weakness of the rouble, and a global oil price revised down further and stuck at around $75 a barrel, means Russia has slumped from eighth to 10th biggest economy this year – and is forecast to stay there at least till 2030.
The prospect of Scotland still deciding to leave the UK, despite the rejection of independence in September’s referendum, is acknowledged by the CEBR. It forecasts that although break-up of the union would delay the rUK (the rest of the UK) overtaking Germany by 2030, it would only take a further seven years for this to happen.
GDP – the value of all final goods and services produced inside sovereign states – is not the only way of calculating economic power. PPP (purchasing power parity), also based on IMF estimates, already makes China the world’s largest economy.
Regardless of which measurement is used, the CEBR say that with globalisation reaching a “mature phase” by 2030, the world’s economic league placings are “settling down to a new order”.
Biggest economies: Top 10 2014
1 United States (last year: 1)
2 China (2)
3 Japan (3)
4 Germany (4)
5 United Kingdom (6)
6 France (5)
7 Brazil (7)
8 Italy (9)
9 India (10)
10 Russia (8)
