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Monday, April 5, 2010

General Commentary: Which Economies Will Grow the Fastest?

A recent report by Price,Waterhouse, Coopers, the world's largest professional services firm, projects long-term economic growth rates (to 2050) for the world's fastest growing economies. According to the report, China is expected to overtake the U.S. as the world's largest economy in around 2025 , while India will nearly catch up with the U.S. by 2050. The report also ranks the twenty fastest growing economies according to their projected average annual GDP growth over the next forty years. In order of ranking, these are: Vietnam, India, Nigeria, the Philippines, Egypt, Bangladesh, China, Indonesia, Pakistan, Malaysia, Thailand, Iran, Brazil, Turkey, Argentina, South Africa, Saudi Arabia, Mexico, Russia, and Poland.

Such long-term predictions should be taken with a grain of salt. However, it is likely that if the report proves to be generally correct, a selection of better stamps from these countries will do well over the next decades as these countries become more prosperous, assuming that the prosperity is sufficiently shared to allow for a growing middle class. Obviously, when assessing each individual country's prospects, the political and economic risks should be taken into account. Diversifying so as to create a "portfolio" of better stamps from among the high growth countries would tend to lessen the overall risk.

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