France will temporarily overtake the UK to become the world’s sixth biggest economy as Brexit takes its toll, a report has said.
The Centre for Economics and Business Research (CEBR) said that while a no-deal Brexit would do the most economic damage in the short-term, a depressed British economy is inevitable in any case due to lower business and inward investment. This could give France – or possibly India – a chance to catch up.
However, CEBR’s 2018 World Economic League Table, which makes predictions for 180 countries’ economies up until 2033, forecasts the UK returning to the sixth spot after the dust settles in 2020 and staying there until at least 2023.
CEBR also predicts that in the event of Brexit leading to Scottish and Northern Irish independence, the rest of the UK will still be a larger economy than France in 2026 due to France “not really coming to terms with reducing its bloated public sector and resulting higher taxes”.
The US remains the world’s largest economy, but China is predicted to steal the coveted top stop by 2032. Currency collapses led to falls in the rankings for Argentina (down four places to 30th), Pakistan (down three to 44th) and Iran (down 10 places to 40th).
Douglas McWilliams, deputy chairman of CEBR, said: “[The table] shows that despite global uncertainty and tightening in US monetary policy which has pushed down some of the emerging market currencies, the 21st century is still likely to to be the Asian century.
“In 2003, the world’s five largest economies were the US, Japan and three European countries. Thirty years later, three out of the top five economies are expected be Asian and only one will be European. This is one reason why even though Brexit will be disruptive in the short term, it is not thought likely to do much long-term damage to the UK economy and, on some assumptions, could even boost it.”
This follows the news that Britain’s economy has slowed since the 2016 referendum and growth is now at its lowest in almost a decade.
Earlier in the year, the British Chambers of Commerce forecast that 2019 would be the weakest year for growth since the country’s last recession, due to depressed business investment and weakened consumer demand.
Source: Yahoo Finance UK