2. Economic projections to 2060

World population has been increasing in recent decades and is projected to continue to increase in the coming decades. The Baseline scenario projects global population to reach more than 10 billion people by 2060 (Figure 2.1), drawing on the “medium scenario” of the World Population Prospects (UN, 2017[1]) and the Eurostat projections for European countries (Eurostat, 2018[2]). The pace of population growth is projected to slow between 2019 and 2060, in contrast with the strong growth seen over the past 40 years. Over the next four decades (between 2019 and 2060), global population is projected to grow by 0.7% per year on average, compared to the annual growth rate of 1.4% over the period 1980-2019.

This slowdown in population growth applies to all countries. However, population growth trends will vary across countries. Some countries are projected to even face negative growth (many European countries, Japan, Korea, and China). At the other extreme, Sub-Saharan Africa (Other Africa in Figure 2.1) is projected to experience high population growth (over 3% per year over 2019-2060). As a result, more than 26% of world population in 2060 is projected to be in Sub-Saharan Africa, compared to 15% in 2019. In contrast, the OECD share shrinks from 18% in 2019 to 15% in 2060 (Figure 2.1).

In the coming decades, the global population is not only projected to increase, but to also become wealthier on average. Living standards (measured as GDP per capita) are projected to increase over the entire period, with most countries gradually converging towards OECD levels (Figure 2.2).1 Global income per capita is projected to reach the OECD 2019 levels by 2060 (USD 41 000). Despite the slower growth, average income in OECD countries more than doubles, from USD 41 000 in 2019 to USD 86 000 in 2060.

The improvements in living standards over the 2019-2060 period (blue bars in Figure 2.2) are projected to be greatest for emerging countries with current low levels of per-capita GDP, and especially for India. Countries that are fossil-fuel exporters, such as those in the Middle East and North Africa region and the “Eurasia” group, which includes the Russian Federation (hereafter ‘Russia’), are projected to grow less rapidly than the average non-OECD country, as fossil fuel revenues do not grow as rapidly as other contributing factors to GDP. In contrast, European countries that have recently joined the European Union (EU), especially those labelled as “Other EU” (including for instance Romania and Bulgaria), are projected to grow rapidly. Living standards in developing economies will still be far from those of OECD countries at the end of the time horizon, despite the convergence process, but they will come close to 2019 levels, with the exception of Sub-Saharan Africa (“Other Africa”; see Table A A.2 in Annex A for a list of the regions used in ENV-Linkages).

GDP increases in all regions (Figure 2.3), even in countries where population is declining, since the growth of GDP per capita has a larger impact than population changes. Global GDP is projected to more than triple between 2019 and 2060, from USD 131 trillion to USD 418 trillion.

In 2020, the COVID-19 pandemic caused a significant contraction in global GDP, with the annual global GDP growth rate dropping from around +4% in 2019 to -4% in 2020 (Dellink et al., 2021[4]). Increased unemployment, reduced labour productivity, a collapse in demand for certain commodities and higher trade costs all depressed economic activity. In 2021, many countries observe a rebound effect. In the longer run, while GDP growth is projected to return to the levels expected before the COVID pandemic, GDP levels are not.2

The Baseline scenario projects the global GDP growth rate to slow down and stabilise at about 2.5% after 2030. While India and large parts of Sub-Saharan Africa are projected to record high growth rates and then become important drivers of world growth in the 2019-2040 period, the projected slowdown of the Chinese economy after 2025 dominates. From around 2040, the most dynamic regions are projected to be emerging economies in Asia (India and Other non-OECD Asia in Figure 2.3).

The share of OECD countries in global GDP in 2060 is projected to fall to 31% from 44% in 2019 (Figure 2.4), since growth rates in non-OECD countries are higher. The importance of the non-OECD Asian countries will increase at the global level (increasing from 37% in 2019 to 48% in 2060). While China will maintain its importance (with a global share of GDP decreasing from 20% in 2019 to 18% in 2060), India and some fast-growing economies in the “Other non-OECD Asia” region - specifically Indonesia and the Philippines - will represent a much larger share of the global economy. In particular, the strong economic growth in India will result in its share of global GDP increasing from 8% in 2019 to 18% in 2060. Within other regions, some countries will become increasingly important in driving economic growth: Egypt in the Middle East & North Africa region, Nigeria in Sub-Saharan Africa (Other Africa) and Peru in Latin America.

Projecting economic growth is subject to uncertainties. The model is based on long-term projections of key socio-economic drivers, all of which are uncertain. Most notably, future population growth and the speed of convergence across countries can affect long-run economic projections (Box 2.1). Furthermore, while the Baseline scenario takes into account the effects of the COVID pandemic, the longer-term effects are still largely unknown. For instance, a slower recovery would imply slower growth in the long-run (Dellink et al., 2021[4]), as explored in Box 2.2. Finally, other uncertain events that can affect regional and global growth are difficult to include in the Baseline. For instance, the recent war in Ukraine will certainly affect regional and global growth (Box 2.3). Nevertheless, due to the high uncertainty of the current situation and in its developments in the coming years, the Ukraine war is not included in the ENV-Linkages economic baseline.

The structure of the global economy is evolving as living standards transform preferences; as society adjusts to demographic changes, such as ageing and urbanisation; and also as the nature of production evolves, rely more on digital technologies and services. The main change in the structure of the economy projected for the coming decades is an increase in the demand for services, on the part of households, governments and firms.

As income per capita increases, households spend relatively less on necessary commodities (food and agricultural products) and on manufacturing goods, and more on services, for instance recreational and leisure activities, as well as health and education. Expenditures on durable and equipment goods are also projected to change. For example, they will shift away from paper, towards more electronics and vehicles.

Similar trends in the composition of governments and investment expenditures are also projected, including increasing shares of education and R&D expenditures. Ageing also induces a shift in demand towards more services, especially health and other long-term elderly care expenditures.

The changes in the structure of the economy are also driven by changes in intermediate demand, i.e. demand for produced goods and services by firms. The main structural transformation projected is for the services sectors, and especially the business services sector, to grow faster than the rest of the economy over the period 2019-2060 (Figure 2.7). This effect, referred to as “servitisation”, is due to an intensification of services as inputs to all sectors, digitalisation, and the increase of research and development (R&D) expenses.

The structure of regional economies is also influenced by trade patterns, as supply and demand are linked via international trade. In particular, regions can specialise in the production of certain goods and services, while maintaining or expanding a broad availability of goods and services for households and governments.

As a consequence of the servitisation of the economy, the share of the plastics sector grows more slowly than the economy-wide average. However, since plastics are widely used in the economy, the demand for plastics still grows over time, responding to population and economic growth, but also to the fact that business services in particular use plastics, especially for packaging. As illustrated in Figure 2.7, plastics is a small sector of the global economy. Overall, plastics production represented 1.3% of the global economy in 2019, and is projected to slightly decline by 2060 (to 1.2%), with the global monetary value of plastics used in the economy increasing from USD 4.9 trillion in 2019 to USD 12 trillion in 2060. Box 2.4 explores the effects of the COVID-19 pandemic on sectoral production and what it might mean for plastics.

Technical progress is a main driver of economic growth. A wide range of evolutions influence technical progress, including continued efforts to optimise production processes, new business models, and the diffusion of best available techniques. The changes in production technologies also imply changes in the input structure (e.g. substitutions of production inputs, labour or capital). Labour efficiency changes over time, driven by country-specific progress in education levels, investment in innovation, and improvement in the quality of institutions and market regulations.

The production of manufacturing goods is an interesting example of these production changes. Table 2.1 illustrates changes over time in the cost structure of aggregate manufacturing goods production for OECD and non-OECD countries. Inputs of services increase, reflecting the servitisation phenomenon described in Section 2.3, while other inputs of goods and services decrease. Thanks to improvements in the efficiency of production technologies, the inputs of plastics in the production of manufacturing goods also decline (from 3% in 2019 to 2% in 2060 on average in both OECD and non-OECD countries).

In both OECD and non-OECD countries, unit production costs are projected to decline, reflecting higher productivity resulting from technical progress. However, this effect is stronger in non-OECD countries, where a higher rate of convergence also leads to more marked changes in productivity over time. In all regions, production costs shift away from industrial inputs towards more services.


[4] Dellink, R. et al. (2021), “The long-term implications of the Covid-19 pandemic and recovery measures on environmental pressures: A quantitative exploration”, OECD Environment Working Papers, No. 176, OECD Publishing, Paris, https://doi.org/10.1787/123dfd4f-en.

[2] Eurostat (2018), “Population projections”, Eurostat (online data code: tps00002), http://ec.europa.eu/eurostat/web/products-datasets/-/tps00002 (accessed on  July 2018).

[3] Guillemette, Y. and D. Turner (2018), “The Long View: Scenarios for the World Economy to 2060”, OECD Economic Policy Papers, No. 22, OECD Publishing, Paris, https://doi.org/10.1787/b4f4e03e-en.

[6] IMF (2020), World Economic Outlook, October 2020: A Long and Difficult Ascent, International Monetary Fund, Washington, D.C., https://www.imf.org/en/Publications/WEO/Issues/2020/09/30/world-economic-outlook-october-2020 (accessed on 22 January 2021).

[8] OECD (2022), OECD Economic Outlook, Interim Report March 2022: Economic and Social Impacts and Policy Implications of the War in Ukraine, OECD Publishing, Paris, https://doi.org/10.1787/4181d61b-en.

[5] OECD (2020), OECD Economic Outlook, Volume 2020 Issue 2, OECD Publishing, Paris, https://doi.org/10.1787/39a88ab1-en.

[7] OECD (2019), Global Material Resources Outlook to 2060: Economic Drivers and Environmental Consequences, OECD Publishing, Paris, https://doi.org/10.1787/9789264307452-en.

[1] UN (2017), “World Population Prospects: key findings and advance tables”, https://esa.un.org/unpd/wpp/publications/Files/WPP2017_KeyFindings.pdf (accessed on 18 May 2018).


← 1. The macroeconomic projections for OECD and G20 countries match the long-term macroeconomic projections of the OECD Economics Department (Guillemette and Turner, 2018[3]). For the remaining countries, projections are provided by the OECD ENV-Growth model (Annex A).

← 2. The implications of the COVID-19 pandemic and government response measures are based on the assessment of a detailed set of shocks to employment, productivity, demand and trade (Dellink et al., 2021[4]), reflecting the macroeconomic implications of the pandemic quantified in the OECD Economic Outlook (2020[5]).

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