Brazilians’ standard of living could go from around 23 percent of that of the U.S. to 27 percent in 2060 — that is, it will remain practically stagnant — unless the country undergoes major structural reforms. The findings are from an Organization for Economic Co-operation and Development (OECD) study on long-term fiscal pressure in its 38 member countries released this Tuesday.
The scenario used by the organization predicts that annual GDP growth in the OECD and G20 countries combined will decline from about 3 percent post-pandemic to 1 percent in 2060, mainly in light of the slowdown in emerging economies.
According to the organization, real per capita growth in the OECD area will be more stable, at around 1.25 percent per year, below historical levels. This could help slow down the emerging G20 economies, with the exception of countries such as Brazil, Argentina, and South Africa, which have already had poor performance in recent years.
The OECD forecasts a rise in Brazil’s potential GDP per capita of 1.1 percent per year between 2020 and 2030, and 1.4 percent between 2030 and 2060. However, the study indicates that “the continuation of relatively poor productivity performance implies a much slower convergence to the U.S. standard of living.”
China and India, on the other hand, will continue to represent the main drivers of economic growth around the world. China, for example — which had a real GDP growth of 10 percent a year between 2000 and 2007 — is tipped to see 4.2-percent annual growth between 2020 and 2030, which would fall to 2.1 percent between 2030 and 2060.
From 2040 onwards, India’s contribution is expected to exceed that of China, expecting that the Chinese population will have decreased by that point. Even so, China will remain the largest economy through 2060 based on purchasing power parity.
Moreover, the two Asian giants are expected to catch up with the American lifestyle more quickly than other emerging countries, such as Brazil. India is expected to rise from 11 to 28 percent of the U.S. standard of living between 2021 and 2060. And China is expected to rise from 26 to 51 percent by 2060.