The magic of currencies: UK overtakes Brazil as the world’s sixth largest economy
Despite recession and the poor performance Britain has clawed back the ground it lost to Brazil in the rankings of the world's richest economies - but it is not expected to hold on to the spot for long.
Only a year after being surpassed by Brazil for the first time, Britain has edged back ahead of Latin American largest economy in 2012 thanks to the weakness of the Brazilian currency, according to estimates from the Centre for Economics and Business Research.
Britain's national output is estimated at 2.443 trillion, compared with Brazil's 2.282 trillion, according to the consultancy. Next year Britain is likely to push ahead of France as well, as the Euro member's high taxes on the wealthy weigh on competitiveness, the CEBR predicts.
However, Britain will resume its slide back down the rankings later in the decade as emerging nations enjoy rapid growth. Brazil, which hosts the football World Cup in two years' time and the Olympic Games in 2016, will bounce back to overtake Britain as soon as 2014, before pushing “decisively beyond us”, the CEBR says.
Britain's race with Brazil shows the importance of currency movements in determining the size of countries' economies. Britain has experienced no economic growth at all this year, but the pound has enjoyed gains against the dollar, in contrast to the real, which has lost ground.
Britain is widely expected to enjoy a somewhat stronger year in 2013 than in 2012, with growth forecast by the Office for Budget Responsibility at 1.2%, compared with a 0.1% contraction this year. But Brazil's growth is expected to be much punchier: the IMF projects expansion of 1.5% this year and 4% in 2013.
The analysis rates the US, China and Japan as the biggest three economies in the world in 2012 and they are expected to maintain those positions for the next 10 years, at least.
In their wake China will continue its heady ascent. Its economy is only 53% of the size of America's at present, but by 2022 that figure will have risen to 83%.
European countries, by contrast, are expected to slip relentlessly down the league table. India is forecast to overtake Britain in 2017, making it the largest economy in the Commonwealth, the CEBR predicts. Germany will drop from fourth place now to sixth place in 2022 as it, too, is overtaken by India and Brazil.
Britain will slip two places over the next ten years, falling from sixth place to eighth. France will suffer a more precipitous fall, dropping from fifth place to ninth, while Italy will drop from eighth place to thirteenth.
The big gains will be seen among emerging markets, with India becoming the fourth-biggest economy in the world by 2022. Indonesia, which the world's sixteenth-largest economy at present, will jump six places to enter the top ten by 2022.
Douglas McWilliams, of the CEBR, said: “We have been neck-and-neck with Brazil for some time. Last year they overtook us; this year we have overtaken them again. From 2014 onwards, however, their more dynamic economy is likely to pull them decisively beyond us”.
”We are beating some other countries, though. We are poised to overtake France either in 2013 or 2014, as the economic effects of President Hollande's 75% tax policy and the difficulties of the Euro drag France down”.
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23 comments Feed
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UK is compared with Brasil/Argentina
not with France/Germany/Japan....
Mind you I did see France, Germany and Japan mentioned in the article.... but no Argentina.
Why do people make stuff up?
You claim to be in your 20's and a female.
Why is it that you cannot read the article correctly? There is no mention of Argentina, why would there be given the dire situation they are in through the antics of TMBOA.
And what a foolish comment you made regarding France, Germany and Japan.
Perhaps you are unused to disseminating financial date accurately and without bias. Many Argentines have a similar problem: it must be the waste of time in school discussing the mythical Malvinas instead of getting in touch with reality.
A minor correction: Brazil has 35 times the area of the UK.
We don't have three times the GDP of Brazil. At first i thought you meant Argentina....But we they have a smaller population than ours.
Not sure who you meant there.
GDP per capita (nominal):
UK: $38,500
Brazil: $12,500
GDP per capita (PPP)
UK: $35,500
Brazil: $11,500
Pretty much 3x. Per capita is a much better comparison.
I don't compare UK/Argentina ..“ briton” compares.
*5*
I have looked around 20/female, but haven't find yet !
*11*
per capita highest countries Luxembourg...BAE...
are they powerful countries in the world arena ? ...NO !
BAE is NOT a country, it is a very large COMPANY, and yes, it is powerful.
I have NO idea what you mean by this:
“I have looked around 20/female, but haven't find yet !”
i meant UAE (united arab emirates )not BAE.
www.youtube.com/watch?v=XbLfje8_jgI
www.youtube.com/watch?v=cVVW4MYGb7M
Yes, yes etc. You are always right!
Now go away and play with the rest of the children and leave us grown-ups alone. Good boy.
Britain exports aircraft, military, medical, technology, music, films, medicine, chemicals, education, satellites, whisky, food, tv content, software. And you export ....... some wine.
I guess you don't find jet engines very interesting then?
You will find a lot of aircraft and ships worldwide using our Rolls Royce engines.
We can all be thankful that you are not Chancellor. You can't spend your way out of debt, if we did our economy would be in the same state as Argentina's is, with high inflation, increasing unemployment etc.
Austerity isn't nice, but it's necessary. That's what happens when a socialist government spends all the country's money on 'initiatives', and creating a welfare culture; then borrows money and spends that on the same 'non-profit' stuff, then borrows EVEN more money and does the same.
The last government behaved irresponisbly (surprise, surprise - Labour have never done that before - oh wait they did in the 1970's), with no thought on how to solve the problem.
The cuts we are facing now are a direct RESULT of irresponible SOCIALISM!
I truly hope that Labour never get in again, because all they do is feck up the economy.
The fact that we have overtaken Brazil is good news, and shows that despite the recession that our economy and currency is stable enough to weather the storm.
Perhaps instead of bitching about the austerity you could try getting off your backside and getting a job and PUT back into society instead of always standing there with your hand held out for money you didn't earn, and in my opinion don't deserve.
Blind_Scottie_Kirchnerist may be much older than you imagine.
He appears to have been involved with the old commie labour party, the one that fucked the shipyards up in Glasgow.
If I am correct he is at least 70 Y/O which probably explains his delusions of socialism and his sexual deviancy with TMBOA.
You maybe right, but I'll bet he's never done a hard day's work in his life.
If he was a member of the commie Labour party, then he's probably a traitor too. If I'm not mistaken, many of the Unions were accepting money from the USSR to undermine the UK economy, by constantly striking, and forcing industry to close.
Thank God for Maggie, breaking the Unions strangle hold when she did.
Don't get me wrong, I'm all for Unions protecting the rights of workers, but many of the Unions in the 1970's tried to dictate how the country was run, without running for Parliament and gaining the consent of the people. This was completely outside of the remit of the Union, and was, as I said earlier, funded by an enemy of the UK. A bunch of traitors, the lot of them.
Totally agree with everything you have posted.
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