Vietnam is projected to become the 22nd largest economy in purchasing power parity (PPP) terms in 2050, British auditor PricewaterhouseCoopers said in a report released Tuesday.
The Southeast Asian country, along with Nigeria and the Philippines, are the “notable risers” in the global GDP rankings in the long term, reflecting relatively high projected average growth rates of around 4.5-5.5 percent per annum over the period to 2050, according to PwC.
China has already overtaken the US in 2014 to become the largest economy, whereas India has the potential to become the second largest economy in the world by 2050 in PPP terms, the London-based auditor said in its “The World in 2050” report.
PwC said new emerging economies like Mexico and Indonesia could be larger than the UK and France by 2030 (in PPP terms), adding that Nigeria and Vietnam “could be the fast growing large economies over the period to 2050.”
In 2014 Vietnam stood at the 32nd place on the global GDP rankings in PPP terms with a GDP at PPP of $509 billion, according to data released in October last year by the International Monetary Fund.
The PwC projected Vietnam’s GDP at PPP to rise to $1.31 billion in 2030, enabling the country to jump to the 28th notch, and $3.43 billion in 2050, equaling the 22nd place.
The auditor said its projection is that Vietnam could grow at an average annual rate of 5.3 percent.
“However, in order to realize this, Vietnam needs stronger macroeconomic policy frameworks to realize this potential,” it noted.
Either the purchasing power parity rates (PPPs) or the market exchange rates (MERs) may be the most appropriate tool to measure the relative size of economies at different stages of development, according to PwC.
“In general, GDP at PPPs is a better indicator of average living standards or volumes of outputs or inputs because this correct for relative price differences, while GDP at MERs is a better measure of the relative total size of markets for businesses at a given point in time,” the company said in the report.
“Projections of MERs are subject to particularly high margins of uncertainty, however, which is why both the report and this media release focus primarily on projections of GDP at PPPs.”
PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients, according to the company’s website.
The company boasts a network of more than 184,000 people in 157 countries.