The Centre for Economics and Business Research (CEBR) said its latest World Economic League Table showed Asian countries moving up and European countries falling back, reports BBC.
Latest figures from the Centre for Economic and Business Research’s annual world economic league table, showed that the UK is now the seventh richest country in the world, and has fallen behind a South American nation for the first time.
CEBR chief executive Douglas McWilliams told BBC Radio 4’s Today programme that Brazil overtaking the UK was part of a growing trend.
“I think it’s part of the big economic change, where not only are we seeing a shift from the west to the east, but we’re also seeing that countries that produce vital commodities – food and energy and things like that – are doing very well and they’re gradually climbing up the economic league table,” he said.
The US, China, Japan, Germany and France occupied the top five places, and India was placed on the tenth spot in the list, the Economic Times reports.
While Brazil’s economic growth is forecast to slow from 7.5 percent in 2010 to 3 percent this year, that’s still faster than the 0.9 percent growth economists expect from the U.K., according to Bloomberg surveys.
“The countries that will grow the most are the emerging markets such as Brazil, China, India and Russia,” Brazilian Finance Minister Guido Mantega said in a statement. “The trend is for Brazil to remain one of the world’s top economies.”
Brazil has a population of about 200 million, more than three times the population of the UK.
Brazil’s economy grew by 7.5% last year, but the government has cut its growth forecast for 2011 to 3.5% after the economy ground to a halt in the third quarter, with analysts blaming the country’s high interest rates and the worsening situation in the eurozone.
Britons continue to be better off and enjoy a far higher standard of living than the vast majority of people in Brazil but the latter’s 203 million population provides huge economic clout, the paper said.
And although Brazil currently sells more to China than it imports, Brazilian manufacturers have complained that their industries are being affected by cheap mass-produced goods from the Asian giant.
“The punching power of Brazil as a whole has overtaken Britain because of the huge economic potential of people who live there,” said Peter Slowe, a former government economic policy advisor.
“Brazil has a variety of natural resources to rely on including gold and silver as well as oil off-shore and minerals in the Amazon. By contrast the UK economy is affected by the problems of the eurozone,” Slowe added.
Rising real wages and a boom in credit have also fueled demand by Brazilian consumers in recent years, with an emerging middle class going on a shopping spree for new cars and refrigerators.
Foreign companies are seeking to profit from the nation’s growing pie. Foreign direct investment has jumped to a near- record $75 billion in the 12 months through November, up from $38 billion a year earlier, according to the central bank.
The CEBR also said that Russia moved up one spot in its league table to ninth in 2011, and predicted that it would rise to fourth spot by 2020.
And it said European countries would drop down the table, with Germany falling from fourth in 2011 to seventh in 2020, the UK from seventh to eighth, and France from fifth to ninth.