Population growth will help propel Australia to become the world’s 11th biggest economy within a decade, a report predicts.
The London-based Centre for Economics and Business Research is forecasting Australia will climb two places on its world economic league table by 2026 from its current ranking of 13.
Countries that depend on brainpower to drive their economies will generally overtake those dependent on natural resources, with China tipped to replace the US as the world’s biggest economy in 2030, the centre says.
While Australia’s economic growth has been fuelled by resources in recent years, the centre also noted that it’s become one of the most popular countries in the world for inward migration.
And it’s particularly Australia’s intake of migrants with highly sought-after skills that will help fuel its future growth.
“The growing population means the economy is forecast to rise from 13th largest in 2017 to 11th largest economy in 2026,” said the centre’s 2018 World Economic League Table, which ranks the world’s economies by gross domestic product measured in US dollars at market prices to 2030.
“Investment in urban infrastructure will need to accelerate as population increases.”
Australia took in just under 190,000 permanent migrants during the 2015-16 financial year, the majority of whom were skilled.
Some, however, believe we should trim our intake.
A survey published by the Australian Population Research Institute in October found three-quarters of Australians believe the country doesn’t need any more people and nearly half support a partial ban on Muslims migrants.
The institute said at the time it believed the results were driven by the impact of population growth on people’s quality of life and the rapid change in Australia’s ethnic and religious make-up.
But the Centre for Economics and Business Research’s report says that with the digital revolution set to power the world economy through to 2032, countries will need creative workers and one of the best ways to get them is through migration.
It also predicts energy prices will fall in the next 25 years amid a substantial rise in the use of renewables for power generation and growth of energy supplies from fracking.
Resource-rich economies that failed to diversify risked having their economic growth impeded, the centre warned.
Meanwhile some of Australia’s closest neighbours are expected to enjoy booms, with the centre forecasting the economic rise of developing countries.
Indonesia and Korea are expected to enter the top 10 of the world’s biggest economies by 2032, with Taiwan, Thailand and the Philippines all on track to enter the top 25.
“By 2030, three of the world’s top four economies will be Asian (China, India and Japan),” the centre said.