MONTREAL ― Canada’s high levels of immigration have pushed the country back into the world’s top 10 largest economies, and the country is expected to keep rising in the rankings over the next decade, a new report predicts.
For decades, economists predicted Canada’s economy would drop out of the ranks of the world’s largest as less-developed countries caught up with the developed world. And, indeed, Canada did fall out of the top 10 about a decade ago.
Watch: What’s in store for Canada’s economy in 2020? Story continues below.
But the annual World Economic League Table from the London-based Centre for Economics and Business Research (Cebr) shows Canada has regained its top-10 status, ranking as the 10th largest economy in the world in 2018 and 2019.
East Asia’s once-booming economies aren’t growing as quickly as they had been. Meanwhile, Canada’s ability to attract skilled immigrants means it will keep growing in the rankings, Cebr said in a report. It expects Canada to overtake both Italy and Brazil to have the world’s 8th-largest economy by 2029.
“One of the persistent themes of this report is that countries that are successful in attracting skilled migrants tend to grow faster. And reflecting this, Canada and Australia, which are two of the most successful countries at attracting inward migration, are predicted to rise in the rankings,” Cebr said.
The slowdown in Asia means Cebr expects China to overtake the U.S. as the world’s largest economy a little later than previously expected, around 2033, from an earlier estimate of around 2030.
Strong growth in the U.S. means the country accounted for 24.8 per cent of the global economy in 2019, its highest share since 2007, the report noted.
“The biggest surprise is how well the U.S. economy has managed to do, reaching its highest share of world GDP for 12 years,” Cebr deputy chairperson Douglas McWilliams said in a statement.
“Though our view is that it has reached its high water mark and, moving forward, the deficit and its trade disputes will start to hold it back. Still, this is a remarkable performance for an old world economy. ”
U.S.-Chinese tensions could define global economy
The report noted that India has now “decisively” overtaken Britain and France to have the world’s fifth-largest economy. By 2034, it will have leapfrogged Germany and Japan to take third place, after China and the U.S., Cebr predicts.
Despite many developing countries ― particularly in Asia ― rising in the ranks, the emerging global economy is one that will be dominated by the U.S. and China, Cebr said, with those two countries together controlling 42 per cent of the global economy by 2034.
“The 2020s are set to be a decade marked by continued tensions between the U.S. and China on multiple fronts, ranging from trade to tech, which will cast a long shadow over the rest of the global economy.” Cebr senior economist Pablo Shah said.