Since Goldman Sachs Group first put forward the long-term economic growth forecast for the BRICS countries 20 years ago, long-term economic growth forecasts have been made regularly. This year, Goldman Sachs Group expanded the forecast to cover the performance of 104 countries up to 2075. Goldman Sachs Group identified four major themes of the global economy:

1. The slowdown in population growth has led to a slowdown in global potential growth.

2. Emerging markets will continue to grow under the leadership of Asian powers (the top five economies in the world in 2050 will be China, the United States, India, Indonesia and Germany).

3. The United States has lost its glory in the past decade (the United States has often performed better than expected in the past decade, but history will not repeat itself in the next decade).

4. With the strong economic growth of emerging market countries, the global income gap will narrow, but the intra-regional income gap will widen.

The term BRICs, with the initials of Brazil, Russia, India and China, was coined by Jim O'Neill, Goldman Sachs Group's former chief economist, and has since become a proper noun. The term first appeared in his report "Building a better BRICS Global economy" published on November 30, 2001. In 2003, Goldman Sachs Group began to forecast the long-term economic growth of the BRIC countries and related economies. In December 2011, Goldman Sachs Group expanded his forecast to 70 economies. This year, Goldman Sachs Group further expanded his forecast to cover 104 countries, from 2050 to 2075.

Weak population growth slows global potential growth

Goldman Sachs Group said global economic growth had slowed from an average annual growth rate of 3.6 per cent in the decade before the global financial crisis to 3.2 per cent (market-weighted) in the decade before the COVID-19 epidemic. The slowdown is wide-ranging-both developed and emerging economies have slowed. It is mainly affected by the dual factors of slowing global population growth and weak productivity growth, while weak productivity growth is related to the slowing pace of globalization. Goldman Sachs Group believes that global economic growth has peaked and will grow at an average annual rate of 2.8% from 2024 to 2029, after which it will enter a slow decline.

Goldman Sachs Group believes that the main reason for the slowdown in global economic growth is the slowdown in population growth. Over the past 50 years, global population growth has halved, from about 2 per cent a year to less than 1 per cent at present, and United Nations population projections show that global population growth will fall to close to zero by 2075. Although population growth had been expected to slow, the slowdown was faster than expected (the global population is now expected to peak at about 10 billion, compared with a previously expected population of more than 11 billion). This problem is good for the sustainable development of the global environment, and the control of population is a necessary condition for environmental improvement. However, slowing population growth and the resulting ageing will pose many challenges to the economy (most notably rising health care and retirement costs). In the coming decades, the economies of more and more countries (including developed and developing countries) will face serious challenges of population aging.

Asian powers lead emerging markets to catch up

Goldman Sachs Group said in the report that although the real GDP growth of both developed and emerging economies has slowed, relatively speaking, the growth of emerging markets will continue to exceed that of developed economies. The rate of convergence is slightly slower than in the first decade of the last century, but much faster than in previous decades, when cross-border income convergence was not the norm. The convergence of income between emerging and developed economies means that the share of emerging markets in global GDP will continue to rise over time; the income of emerging economies will slowly move closer to that of developed economies; and global income distribution will flow more to the growing "middle-income" groups in emerging economies.

Although GDP growth in most economies is lower than Goldman Sachs Group's 2011 forecast, the situation varies from country to country. China, India and Indonesia all performed slightly better than Goldman Sachs Group predicted, while Russia, Brazil and Latin America generally underperformed significantly. Therefore, Goldman Sachs Group expects Asia's weight in global GDP to further increase in the next 30 years. By 2050, Goldman Sachs Group expects the world's five largest economies (in dollar terms) to be China, the US, India, Indonesia and Germany (Indonesia has replaced Brazil and Russia as one of the largest emerging market countries). If the forecast is extended to 2075, countries such as Nigeria, Pakistan and Egypt could become one of the world's largest economies with rapid population growth and reasonable policy and institutional changes.

The good times in the United States are no longer good, and the dollar will depreciate.

The performance of the US economy is unique among the large developed economies. In the past 10 years, the performance of the US economy has been exceeding Goldman Sachs Group's long-term GDP growth forecast. In addition, due to the sharp appreciation of the US dollar during this period, the size of the US economy denominated in dollars greatly exceeded Goldman Sachs Group's expectations. It is not uncommon for individual countries to significantly exceed or fall below such long-term forecasts within five to 10 years-in fact, many have outperformed the US. The question is whether this outstanding performance will be repeated in the next decade. Generally speaking, Goldman Sachs Group does not think so. The potential growth rate of the US is still much lower than that of large emerging market economies, including China and India. In addition, the excessive strength of the dollar in recent years has caused its real value to be significantly higher than its reasonable value based on its real purchasing power parity, which means that the dollar will most likely depreciate over the next decade.

Main risks: protectionism and climate change

Goldman Sachs Group said that the future is full of uncertainty, especially the long-term future. Goldman Sachs Group expects that two of the many risks facing the world will have a particularly important impact on world growth and income changes.

First, populist nationalism could lead to a rise in protectionism and an increased risk of anti-globalisation. Populist nationalists have gained power in several countries, and supply chain disruptions during the COVID-19 epidemic have led to more attention to the resilience of local supply chains. According to Goldman Sachs Group's assessment, so far, this has only led to a slowdown in globalization, but it has not yet been reversed, however, the risk of reversal is obvious. Globalization has always been a powerful force in reducing income inequality among countries, but to maintain the trend of globalization, greater efforts are needed to distribute benefits more equally within countries.

Another risk is the risk of environmental disasters brought about by climate change. Goldman Sachs Group does not believe that achieving economic growth and ensuring sustainable environmental development are contradictory-many countries have been able to "decouple" economic growth from carbon emissions. But Goldman Sachs Group also pointed out that achieving sustainable growth requires the sacrifice of part of economic growth and a coordinated global response, both of which are politically difficult to achieve.