The global economy is currently in a "super-cycle" that will produce average world growth of 3.5 per cent for the 2000-2030 period; well above the 3.0 per cent rate in the prior 20 years, helped by an expected pick-up in global expansion. This is in comparison to the periods 1870-1913 and 1946-73, which also saw unusually rapid world economic development, Standard Chartered said in a new report on emerging markets.

Consequently, the firm expects China to lead the way on reform, enabling its economy to deliver an average 7 per cent growth between 2013 and 2020. With the planned rebalancing of the structure of its economy already underway, more sustained growth of 5.3 per cent is likely for 2021 to 2030.

“As economies across Asia, Africa and Latin America transform themselves on the back of a growing population, an expanding middle class and rapid urbanisation, the share of emerging market economies could rise to 63 per cent of world GDP by 2030, from 38 per cent today; the increasing size of these faster-growing countries is a key driver of the super-cycle,” the firm said in the report.

As a result, world trade could quadruple in value to $75 trillion over this period, supported by new regional and bilateral trade agreements and the effects of globalisation and the internet.

Scepticism has risen in recent years as a result of the slowdown in several major emerging economies, such as China and India, along with the severity of the euro-crisis, however, Standard Chartered suggests that a modest set of reforms could trigger a growth revival in several large emerging economies, including China, India, Indonesia, Nigeria and Brazil.

“Recent pessimism about emerging markets is overdone. Concerns over the middle-income trap, excessive Asian leverage, ‘broken’ growth models and rising US interest rates appear exaggerated. While we have lowered our long-term forecasts for China, India and Europe, the case for an emerging markets-led super-cycle still holds. Successful reforms will be critical for these economies to realise their catch-up potential,” said John Calverley, global head of macroeconomic research.

The report also stated that the growing scale of emerging economies is key to world growth seeing as such economies with growth rates exceeding 4 per cent, now account for 37 per cent of the world GDP, up from 20 per cent in 1980. In this respect, Asia (excluding Japan) is likely to account for two-fifths of global GDP by 2030.

As such, the report argues that 70 per cent of global economic growth between now and 2030 will come from emerging economies, with China set to become the world’s largest economy in 2022, surpassing the US economy. However, China’s per-capita income will still be less than one-third of the US, implying significant scope for further growth.

Meanwhile, many developed economies are still recovering from the 2008-09 financial crisis, with the US economy gaining the strongest momentum in the developed world. As such, the world’s largest economy is estimated to grow at an average 2.8 per cent from 2013 to 2020 and 2.5 per cent in the following decade, the report said.