In this article, we will be taking a look at the 25 largest economies in the world by 2040. To skip our detailed analysis, you can go directly to see the 5 Largest Economies in the World by 2040.
Global Economic Outlook
The current scenario of the global economy doesn’t give us a clear picture of the near-term economic situation with certainty. The recent major events that led to global economic uncertainty began with the emergence of the COVID-19 pandemic, which was followed by worldwide lockdowns, supply chain distributions, international trade cut-offs, downsizing, and most importantly, a crisis in the global health sector. As we mentioned earlier, the economy seems to be in the recovery stage with global growth expected to remain steady at 3.1% in 2024 and 3.2% in 2025.
According to research by The Goldman Sachs Group, Inc. (NYSE:GS), the world’s fastest years of economic growth have likely already passed. Population growth is weakening, climate change, and increasing geopolitical risks, among other factors will impact the global economy. However, the emerging economies and major economies in Asia are directed to keep catching up to richer countries. According to the IMF’s GDP forecast for 2030, 16 Asian countries will be among the leading economies. China, India, Indonesia, and Japan will be among the top six economies by 2050 along with the US and Germany. As per The Goldman Sachs Group, Inc.’s (NYSE:GS) 2075 forecast, China will be the leading economy with India in second place, the US in third place, and Indonesia in fourth. Nigeria and Pakistan will climb up the ranks to fifth and sixth place in 2075, respectively.
The global economy is forecasted to grow at an average of 2.8% annually between 2024 and 2029 and to gradually decline thereafter, as per The Goldman Sachs Group, Inc. (NYSE:GS). This shows a slow economic growth compared to an average growth rate of 3.6% for the 10 years before the global financial crisis and 3.2% in the decade before the COVID-19 pandemic. The reason for slow economic growth is due to the ebbing population growth rate. During the past 50 years, the global population has halved. According to UN projections, the world’s population is expected to increase by almost 2 billion in the next 30 years. This would mean that in 2050 the world’s population will reach 9.7 billion from the current population of 8 billion. The global population could peak at a forecasted 10.4 billion in the mid-2080s. Apart from the population, economists expect weakening productivity to be another key reason for slow GDP growth in the future.
Despite the slow economic growth worldwide, emerging economies will keep on growing more swiftly than developed economies. China is most likely to overtake the US by 2035, becoming the world’s largest economy. China, India, and Indonesia have outperformed Goldman Sachs economists’ forecasts from 2011, while Brazil, Russia, and Latin America have underperformed Goldman Sachs’ projections. According to The Goldman Sachs Group, Inc.’s (NYSE:GS) economists:
“We expect that the weight of global GDP will shift (even) more towards Asia over the next 30 years.”
Corporations: A Key Driver of Economic Growth
Corporations are always a key element in driving the growth of an economy. The US is way ahead of most economies as far as the dominance of corporations is concerned around the world. Leading firms including Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) are key to the US economic progress. Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) are bigger than most economies, having a market capitalization of $2.92 trillion and $3.12 trillion, as of February 10.
Apple Inc. (NASDAQ:AAPL) is a big player in the tech sector. On February 1, Apple Inc. (NASDAQ:AAPL) reported its earnings for the first quarter of fiscal 2024. The company posted earnings per share of $2.18, beating consensus estimates by $0.08 per share. The revenue came in at $119.58 billion, surpassing estimates by $1.31 billion. Apple Inc. (NASDAQ:AAPL) made the following comments during its Q1 2024 earnings call:
“We achieved revenue records across more than two dozen countries and regions including all-time records in Europe and rest of Asia-Pacific. We also continue to see strong double-digit growth in many emerging markets with all-time records in Malaysia, Mexico, The Philippines, Poland, and Turkey, as well as December quarter records in India, Indonesia, Saudi Arabia, and Chile. In Services, we set an all-time revenue record with paid subscriptions growing double-digits year-over-year.”
Microsoft Corporation (NASDAQ:MSFT) is another leading global tech firm. On January 30, Microsoft Corporation (NASDAQ:MSFT) announced its earnings for the second quarter of fiscal 2024. The company reported earnings per share of $2.93, surpassing estimates by $0.16. Microsoft Corporation’s (NASDAQ:MSFT) revenue was $62.02 billion for Q2 2024, ahead of market consensus by $888.19 million. The company continues to expand its cloud and AI network. Here are some of the comments from the Q2 2024 earnings call:
“It was a record quarter driven by the continued strength of Microsoft Cloud, which surpassed $33 billion in revenue, up 24%. We’ve moved from talking about AI to applying AI at scale by infusing AI across every layer of our tech stack, we are winning new customers and helping drive new benefits and productivity gains. Now I’ll highlight examples of our momentum and progress starting with Azure. Azure again took share this quarter with our AI advantage. Azure offers the top performance for AI training and inference in the most diverse selection of AI accelerators, including the latest from AMD and NVIDIA, as well as our own first-party silicon Azure Maia. And with Azure AI, we provide access to the best selection of foundation and open-source models, including both LLM and SLMs, all integrated deeply with infrastructure, data, and tools on Azure.”
Now, let’s take a look at the largest economies in the world by 2040.
25 Largest Economies in the World by 2040
Our Methodology
We have compiled the largest economies in the world by 2040 based on projections made by The Goldman Sachs Group, Inc. (NYSE:GS). To check the room for subjectivity, we also referred to forecasts made by the IMF and PwC for the biggest economies in the world in 2028 and 2050, respectively. To rank the largest economies in the world by 2040, we used the forecasted real GDP for 2040 from The Goldman Sachs Group, Inc.’s (NYSE:GS) Global Economics Paper The Path to 2075. For the countries with similar forecasted real GDP in 2040, we used Population as a tie-breaker. We collected population data from the United Nations Department of Economic and Social Affairs Population Division.
By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using different consensus approaches, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.
25 Largest Economies in the World by 2040
25. Malaysia
Real GDP Forecast (2040): $1.2 Trillion
Population Forecast (2040): 39,279,000
Malaysia is one of the fastest growing economies in the world and its population is expected to reach 39,279,000 by 2040. Malaysia’s real GDP is expected to grow to $1.2 trillion by 2040. Malaysia will be the 25th largest economy in the world by 2040.
24. Thailand
Real GDP Forecast (2040): $1.2 Trillion
Population Forecast (2040): 70,916,000
The population of Thailand is expected to reach 70,916,000 by 2040 and the real GDP is expected to grow to $1.2 trillion. Thailand ranks among the largest economies in the world by 2040.
23. Philippines
Real GDP Forecast (2040): $1.4 Trillion
Population Forecast (2040): 145,022,000
The Philippines is expected to have a population of 145,022,000 by 2040. The Philippines is expected to have a real GDP of $1.4 trillion by 2040.
22. Poland
Real GDP Forecast (2040): $1.5 Trillion
Population Forecast (2040): 37,043,000
The population of Poland is expected to reach 37,043,000 by 2040 and the real GDP is expected to grow to $1.5 trillion. Poland ranks among the largest economies in the world by 2040.
21. Nigeria
Real GDP Forecast (2040): $1.6 Trillion
Population Forecast (2040): 320,780,000
Nigeria is one of the richest African countries. The real GDP is expected to grow to $1.6 trillion by 2040. With a projected population of 320,780,000, Nigeria will be one of the largest economies in the world by 2040.
20. Pakistan
Real GDP Forecast (2040): $1.6 Trillion
Population Forecast (2040): 322,596,000
Pakistan is expected to have a similar real GDP of $1.6 trillion as Nigeria. The population of Pakistan is expected to reach 322,596,000 by 2040.
19. Bangladesh
Real GDP Forecast (2040): $1.7 Trillion
Population Forecast (2040): 196,526,000
Bangladesh is one of the fastest growing economies in Asia and its real GDP is expected to reach $1.7 trillion by 2040. With a projected population of 196,526,000, Bangladesh will be one of the largest economies in the world by 2040.
18. Egypt
Real GDP Forecast (2040): $1.9 Trillion
Population Forecast (2040): 143,423,000
The population of Egypt is expected to reach 143,423,000 by 2040 and the real GDP is expected to grow to $1.9 trillion. Egypt ranks among the largest economies in the world by 2040.
17. Türkiye
Real GDP Forecast (2040): $2.2 Trillion
Population Forecast (2040): 93,058,000
Türkiye is one of the leading economies in the world and its real GDP is expected to reach $2.2 trillion by 2040. Türkiye’s population is expected to reach 93,058,000 by 2040.
16. Australia
Real GDP Forecast (2040): $2.3 Trillion
Population Forecast (2040): 30,356,000
Australia’s real GDP is expected to reach $2.3 trillion and the population of the country is expected to be 30,356,000 by 2040. Australia is one of the largest economies in the world.
15. Saudi Arabia
Real GDP Forecast (2040): $2.4 Trillion
Population Forecast (2040): 44,881,000
The population of Saudi Arabia is expected to reach 44,881,000 by 2040 and the real GDP is expected to grow to $2.4 trillion. Saudi Arabia ranks 15th among the largest economies in the world by 2040.
14. South Korea
Real GDP Forecast (2040): $2.6 Trillion
Population Forecast (2040): 49,320,000
South Korea has a population forecast of 49,320,000 for 2040. South Korea’s real GDP is expected to reach $2.6 trillion by 2040.
13. Italy
Real GDP Forecast (2040): $2.7 Trillion
Population Forecast (2040): 55,258,000
Italy is one of the richest countries in Europe and its real GDP is expected to reach $2.7 trillion by 2040. Italy’s population is expected to be 55,258,000 by 2040.
12. Canada
Real GDP Forecast (2040): $2.8 Trillion
Population Forecast (2040): 43,823,000
Canada will be the 12th largest economy by 2040 and it will have an expected real GDP of $2.8 trillion. By 2040, the population of Canada is expected to reach 43,823,000.
11. Mexico
Real GDP Forecast (2040): $3 Trillion
Population Forecast (2040): 141,055,000
Mexico is one of the emerging economies in the world. Mexico’s expected real GDP is $3 trillion and its population is expected to be 141,055,000 by 2040.
10. Brazil
Real GDP Forecast (2040): $3.5 Trillion
Population Forecast (2040): 230,132,000
The population of Brazil is expected to reach 230,132,000 by 2040 and the real GDP is expected to grow to $3.5 trillion. Brazil ranks 10th among the largest economies in the world by 2040.
9. Russia
Real GDP Forecast (2040): $3.7 Trillion
Population Forecast (2040): 137,111,000
Russia has a population forecast of 137,111,000 for 2040. Russia’s real GDP is expected to reach $3.7 trillion by 2040.
8. France
Real GDP Forecast (2040): $3.9 Trillion
Population Forecast (2040): 66,151,000
France is one of the richest European countries. The population of France is expected to reach 66,151,000 by 2040 and the real GDP is expected to grow to $3.9 trillion.
7. Indonesia
Real GDP Forecast (2040): $4 Trillion
Population Forecast (2040): 308,165,000
Indonesia has a population forecast of 308,165,000 for 2040. Indonesia’s real GDP is expected to reach $4 trillion by 2040.
6. United Kingdom
Real GDP Forecast (2040): $4.3 Trillion
Population Forecast (2040): 70,689,000
The United Kingdom is one of the largest economies in the world and it will be the sixth largest economy by 2040. The United Kingdom’s real GDP is expected to reach $4.3 trillion and the population is expected to reach 70,689,000 by 2040.
Click to continue reading and see the 5 Largest Economies in the World by 2040.
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Disclosure: None. 25 largest economies in the world by 2040 is originally published at Insider Monkey.