The Queen still heads the Commonwealth, but this is the last time leaders will meet with the UK economy as top dog
The Queen may still head the Commonwealth with the UK still the largest economy, but this will almost certainly have changed by the time of the next gathering of the bloc’s leaders, according to forecasts from the Centre for Economics and Business Research (CEBR).
India’s economy will have overtaken the UK well ahead of the next meeting in 2020, although the highly symbolic moment has been delayed by unexpected strength of the pound against the US dollar. CEBR’s projections had previously predicted India would surpass the UK as soon as this year.
The Commonwealth Heads of Government Meeting (Chogm) is currently being held in London, with the next meeting to be held in Malaysian capital Kuala Lumpur.
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By that time it is “all but certain” that India will have a larger GDP than the UK, according to Douglas McWilliams, CEBR deputy chair.
The size of India’s overall economy has rapidly caught up with the UK, with GDP growth of 7.1 per cent in 2016, according to the World Bank. Sustained growth at that pace would double the size of its economy within 10 years.
Meanwhile, UK annual economic growth has only surpassed three per cent once in the past decade.
McWilliams said: “‘Il sorpasso’ cannot be long delayed and now looks likely to happen in 2019, though it all depends on the volatile sterling and rupee exchange rates against the dollar.”
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The government has targeted increased trade with Commonwealth nations as a key focus post-Brexit, as the UK looks to rebalance away from the EU, which currently accounts for a larger proportion of trade than any individual country.
The Commonwealth was formed in 1949 as an intergovernmental organisation as the UK tried to keep ties with countries in the British Empire which they had formerly ruled. India joined in 1947 after being granted independence. By 1967 its economy was worth $49bn, less than half the value of output in the UK, according to the World Bank.
The gap widened considerably in the following years, with the UK’s output hitting $3 trillion in 2007, compared to India’s $1.2 trillion. As recently as 2000, the British economy’s size in dollar terms was more than twice as large as the next largest Commonwealth economy, Canada. India overtook Canada in 2010.
However, the UK remains far ahead of India in terms of GDP per capita, the amount of output per person. GDP per capita was $40,300 in 2016, compared to $1,700 in India.
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