With a population at 100 million already and more than half of its population under the age of 25, the Philippines is looking at significant population growth over the next 40 years. It could become one of the wealthiest nations in the world if it invests in its most important natural resource -- its people Or it could become one of the poorest nations in the world if its economic growth does not exceed its population growth.
HSBC is using some fairly optimistic GDP growth assumptions to support its projections. Its report assumes that the Philippines will achieve an average GDP growth of 8.4% from 2010 to 2020, 7.3% from 2020 to 2030, 6.6% from 2030 to 2040 and 5.8% from 2040 to 2050. These assumptions compare with GDP growth of less than 5% in 2011 after hitting a little more than 7% in 2010. Most experts believe that major factors in the lower growth rate in 2011 were the weakening global economy and the Philippine government's slow start on infrastructure development. Whether the Philippines can sustain increasing investments in large infrastructure projects remains to be seen.
The report from HSBC's global research department predicts that the world’s largest economy in 2050 will be China, followed by the United States. The biggest losers over the next 40 years will be in Europe. HSBC predicts that only five European nations will be in the top 20, compared to eight today.