China, India set to dwarf G7 soon: OECD

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OECD said the combined GDP of China and India was likely to exceed that of all the G7 by 2025.  (Reuters) OECD said the combined GDP of China and India was likely to exceed that of all the G7 by 2025. (Reuters)
SummaryOECD said the combined GDP of China and India was likely to exceed that of all the G7 by 2025.

Italy.

The OECD's exercise underlines the importance of demographics as a long-term driver of savings, investment and growth. China's savings rate, which now exceeds 50 percent of GDP, is expected to plunge by no less than 40 percentage points by 2060, with about half of the drop due to ageing.

Italy, Greece and Portugal are likely to eventually run current account deficits in the order of 10-15 percent of GDP.

China, by contrast, is expected to see its current account surplus widen until the late 2020s as investment falls even faster than savings due to slowing potential growth. Globally, current account imbalances will be back to pre-crisis levels by 2025-2030, potentially undermining growth in the absence of ambitious policy changes, the OECD said.

In keeping with the long-term focus of its report, the OECD assumes that the global financial crisis will have no permanent effect on trend growth rates.

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