What will happen to China and the West in the future? We have the first forecasts

Goldman Sachs has updated its predictions, looking right out to 2075, writes Hamish McRae

China will pass the US in economic size around 2035, earlier than previous estimates have stated (Reuters)

Sometimes in economics it is easier to see what is likely to happen in 20 or 30 years’ time than it is to know what will happen next week. This past year has been one of those times when the forecasters have been dramatically wrong.

The best (or worst) example of that has been the current inflation. In November last year, the Bank of England forecast that: “We expect inflation to rise further to around 5 per cent in the spring next year. After that, we expect inflation to fall.” The latest number for the CPI is 10.7 per cent.

Of course, the Bank people could not have predicted that Russia would invade Ukraine, but even without that, inflation was already overshooting. And this raises the inevitable question: if economists get the near future so wrong, why should we pay attention to their longer-term predictions?