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Australia set for a ranking drop

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Published on: Monday, February 01, 2010

Australia is set to slip down the world economic leader-board over the next five years as fast-growing emerging nations continue to industrialise. Australia is set to slip from the 13th largest economy to 15th by 2014 and may fall to 17th place by 2020.

High levels of skilled migration are essential to address the needs of an ageing population, buoy Australia’s economic growth pace and therefore maintain Australia’s relevance in the echelon of significant global economies.

The International Monetary Fund expects the global economy to grow by 3.9 per cent in 2010. China will be the key driver of global growth together with India, Brazil and east Asian economies.

Australia to slip in global ranking

Australia currently has a key spot in the key G20 grouping, but its lofty position will be under threat over the coming decade. Emerging nations in Asia, Latin America and the Middle East are growing at a fast clip, pushing past advanced nations in Europe, North America and Australia.

Based on current projections from the International Monetary Fund, Australia will be passed by Mexico and South Korea over the next five years in the ranking of world’s largest economies. And over the next decade Saudi Arabia and Indonesia could challenge for Australia’s spot in the grouping of top 15 global economies.

Firm population growth in Australia is not just important in addressing the challenges of an ageing population, it is also important to help the economy maintain fast economic growth and therefore relevance in a world that will in future be dominated by formerly emerging nations, especially those in Asia.

While Australia’s position in the global economy is under threat, it certainly is not alone. The advanced economies of North America and Europe will continue to record slower economic growth rates over the next 5-10 years as their populations become older and population growth slows.

Spain, Canada and Italy will also slip down the global leader-board over the next five years as Russian, Indian and Brazilian economies industrialise and grow at a fast clip.

  


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