US and Asia to lead the AI decade

Global growth will slow in the long run as population growth weakens and the scope for emerging market catch-up narrows, but there will be bright spots. We are increasingly confident that advances in artificial intelligence will lift productivity in advanced economies – especially the US – and support higher neutral interest rates. China’s technological strength will not offset mounting structural headwinds. We expect a marked deceleration in growth that will prevent it from overtaking the US as the world’s largest economy. By contrast, prospects are brighter in South East Asia and India, where favourable demographics and a growing role as alternative hubs in global supply chains should underpin sustained outperformance. Meanwhile, the global economy will continue to fracture into US- and China-led blocs. Although recent “America First” measures have raised the risk of strains within the US-aligned group, long-standing trade, financial and security ties should keep it cohesive. This document contains macroeconomic forecasts out to 2050, which can also be downloaded in more detail through our Long-term Forecasts dashboard.