By Simon Kennedy
Dec. 8 (Bloomberg) -- The financial crisis is recasting the league table of economies, with the U.K. sliding behind its European neighbors and China gaining on its richer rivals, according to the Centre for Economics and Business Research Ltd.
A recession and a decline in the sterling’s value pushed the U.K.’s gross domestic product below France’s this year and it will be passed by Italy in 2009, the CEBR said in a report published today. China has overtaken Germany and will top Japan in 2010 to become the world’s second-largest economy behind the U.S., it said.
“The recession associated with the credit crunch will change the position of many countries in the world’s GDP league table,” the London-based CEBR said in the report.
The study shows how countries that ran up debts during expansion such as the U.K. will now suffer, while emerging- market economies will wield increasingly more power in the global economy as they develop. Governments from the Group of Seven nations are under pressure to broaden their membership to reflect the changing shape of the world economy.
Brazil will rise to eighth-biggest economy from 10th by 2010 and India to 10th from 12th, the CEBR said. Canada will drop to 13th from ninth in the same period as its currency falls, it said.
The CEBR also said the U.K. and Italian economies will suffer the deepest downturns with 18 quarters of GDP below its previous peaks. Spain’s slump will last 16 quarters and Japan’s 11 quarters. The U.S. will rebound after nine quarters. China won’t suffer a single quarter of contracting growth, the report said.
To contact the reporter on this story: Simon Kennedy in Paris at skennedy4@bloomberg.net
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