The practical implications of Brexit on the UK are not at all desirable: the World Economic Forum in its annual index said the Brexit outcome with the EU is ‘likely to further undermine the country’s competitiveness’ in future. Indeed, this critical forecast is a cause for grave concerns.
Very broadly speaking, the Forum’s previous attempts to warn the UK about Brexit’s short and long-term disappointments went futile, and any changes to the country moving in an isolationist direction is likely to face a backlash again. That, the Forum thinks, will set in an increase in the cost of trade, labour and investment, all of which are powerful prerequisites to drive its economic efficiency.
“But a long-term view is crucial for planning for issues like pensions, healthcare, energy and climate change, housing, transport and other infrastructure investment. By looking beyond unpredictable short-term economic and political cycles and focusing on fundamentals, long-term growth projections can actually be more reliable than short-term forecasts,” John Hawksworth, chief economist at PwC, said. “Developing successful trade and investment links with faster-growing emerging economies and recruiting workforce talent wherever in the world it can be found, are essential to achieving this growth and to offset probable weaker trade links with the EU after Brexit.”
The borderline uncertainty on Brexit verdict is already reflecting harsh consequences. At least for now the UK citizens still have the right to move freely in other European countries without being refrained. But there will be no guarantee to their freedom of movement if Brexit comes through. By this example, any negative turnaround might be a potent one for the UK to recover from, especially considering how Europe is showing “cautious signs of recovery” after a decade from its financial crisis.
Yet. “Our relatively positive long-term growth projection for the UK reflects favourable demographic factors and a relatively flexible economy, even by European standards,” Hawksworth explained.
So even if the residual effects of the Brexit cycle settle over time; what about the country’s economic scope for growth, put behind China, India and other developing nations?
Largely, a country’s global ranking is rested on its economic size. At present, the order of ranking has the United States followed by China, Japan, Germany and the United Kingdom. The United States and China are regarded multi-trillion dollar economies, whereas India is a $2.6 trillion economy.
Experts estimate India to rise to fifth position from seventh, and France will remain sixth. To second this, a recent PwC prediction found that Britain might move behind India and France on the GDP front with just 1.6% rise in 2019, whereas India is expected to grow by 7.6%; and France by 1.7%.
One way to look at this is that France and Britain have ‘regularly alternated in having the larger economy’, but the latter’s slowdown from last year is diminishing its economic primacy. However, the Indian economy was found to be $15 billion bigger than the French economy in 2017.
So, the versatility of India a hundred years since to now has uniquely changed—and it will continue to progress upon its own establishments. After all, findings show that “India is the fastest growing large economy in the world, with an enormous population, favourable demographics and high catch-up potential due to low initial GDP per head. It is therefore all but certain to continue to rise in the global GDP league table in the coming decades.”