Friday, September 04, 2015

McKinsey's Four Scenarios

McKinsey has in a spirited crystal-gazing exercise projected four different economic scenarios for the 2015-25 decade. The firm has taken into account four crucial long-term features affecting the global economy, namely technology, aging, urbanisation and global connectivity.

The projected scenarios are two-dimensional involving growth (acceleration / deceleration) and economic trends (convergence / divergence). Accordingly Real GDP annualised growth rate of G20 countries during 2015-25 is arrived at.

The four scenarios are named as 1) Global Synchronicity (accelerated growth and convergent economies), 2) Pockets of Growth (accelerated growth and divergent economies), 3) Global Deceleration (decelerated growth and convergent economies) and 4) Rolling Regional Crises (decelerated growth and divergent economies).

India is projected to have the highest annualised growth rate in all these scenarios. The rates for India are 7.9%, 6.6%, 6.8% and 5.4% respectively. Comparable figures for China are 6.5%, 6.3%, 5.7% and 5.2% respectively.

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