SYDNEY, Feb. 7 (Xinhua) -- Australia's importance relative to the rest of the world is set to fall sharply over the next 30 years, according to a report released by PriceWaterhouseCoopers (PwC) on Tuesday.
The report speculates the global economy will increase by 2.6 percent per annum, while the long-term global shift towards emerging markets will come to fruition.
China is set to become the largest economy, according to the report, which further states the Chinese economy will be 30 percent larger than the next economy down the list, India, leaving the United States to fall to third place.
Also on the list, Japan will fall from 4th to 8th, Germany is projected to stumble from 5th to 9th, with Brazil, Russia, and Mexico surging up the list.
Chief economist at PwC, Jeremy Thorpe says that Australia must take note of the shift towards Asia and away from the U.S. and Europe, and plan accordingly.
"Globally we will continue to see the shift in economic power away from established advanced economies towards emerging economies in Asia," Thorpe said.
"The E7 could comprise almost 50 percent of world GDP by 2050, while the G7's share declines to only just over 20 percent."
Thorpe is also convinced that by 2030, the nine largest Asian economies will make up over 50 percent of the gross domestic product of the largest 32 countries in the world, and has concerns Australia is not doing enough to harness the potential of the region.
"The key opportunity for Australia is to leverage our proximity to Asia," Thorpe said.
"We should be thinking about how we will best capitalise on the increased demand for goods and services right across our region. That's where the bulk of economic growth will be in the next thirty years."
"To succeed, Australia needs to focus on engaging effectively with the emerging Asian economies," Thorpe said.
The outlook that was generated by the report was conducted by analysing purchasing power parity estimates, so although advanced economies may still enjoy higher incomes, the disparity will be lessened within the next 30 years.