Ambrose Evans-Pritchard, the normally dour international economics editor at The Telegraph of London, wrote a surprisingly positive column about the global economy last week. He’s a very smart and plugged-in analyst, and I thought you would like to hear his view.

Evans-Pritchard quotes an HSBC report stating that “the greatest global boom of all time has barely begun.” He adds: “Over the next forty years, economic growth will quicken yet further as the rising powers of Asia, the Middle East, and Latin America reach their full stride.”

Here are the details, according to his report on the study, “The World in 2050”: 

— Crunching everything from fertility rates to schooling levels and the rule of law, HSBC predicts that the world’s economic output will triple again by 2050, provided the major states can avoid conflict. Yearly growth will rise to 3% on average, up from 2% over the last decade.

— China will snatch the top slot as expected, but only narrowly. China, with an economy of $24.6 trillion (constant 2000 dollars), and the US at $22.3 trillion, will together tower over the global economy in a bipolar condominium, with India, at $8.2 trillion, far behind in the third slot, and parts of Europe slithering into oblivion.

— Turkey will vault past Russia, settling an Ottoman score. Egypt, Malaysia and Indonesia all will move into the top 20. Muslim societies may start to reassert an economic clout unseen for centuries. Brazil may disappoint again, stalling at seventh place in 2050 as its birthrate slows sharply and bad schools exact their toll.

— Anglo-Saxon states hold up well in the HSBC model, which is based on the theoretical work of Harvard professor Robert Barro. America’s high fertility rate (2.1) will allow it to keep adding manpower long after China’s workforce has begun to contract in 2020s and as even India starts to age in the 2040s.

— An eightfold jump in the per capita income of China and India will keep growth brisk despite demographic headwinds, but they will not come to close to matching U.S. living standards. Americans will be three times richer than the Chinese in 2050.

— Britain will slip to sixth place but pull far ahead of Italy and France, and almost displace Germany as Europe’s biggest economy. This is chiefly due to the U.K.’s healthy fertility rate (1.9). 

— The low fertility rates of Korea (1.1), Singapore (1.2) Germany (1.3), Poland (1.3), Italy (1.4), Spain (1.4) and Russia (1.4), more or less dooms these countries to aging crises and population decline unless they open the floodgates to immigration.

— Japan is already deep into this phase of atrophy, explaining why the country has had such trouble shaking off the effects of the Nikkei bust. Its total population began contracting outright since 2005. It declined by a record 120,000 last year, and will shrink 37% by 2050.

Evans-Pritchard quotes HSBC study author Karen Ward as stating, “Demography matters.” He adds that the big losers are small states like Switzerland, Netherlands, Sweden, Belgium, and Austria, which will mostly drop out of the top 30 world economies. “They may struggle to maintain their influence in global policy forums,” she said, according to the columnist. 

HSBC works from the assumption, according to Evans-Pritchard, that mankind will avoid the energy crunch by investing $46 trillion in alternative forms of energy to break out of the carbon trap, and head off a supply crisis that could derail growth. The chart below shows that alternative energy stocks in solar and wind companies have been terrible for the past three years, but eventually they should turn higher and outperform. We need to revisit this chart every three months to see if they are ready, as I bet a fortune will eventually be made as the turn away from carbon occurs at some point.

Evans-Pritchard notes at least one big problem ahead: The United Nations expects food demand to rise 70% by 2050, yet the yield growth of crops has slowed to 1.5% a year from 3.2% in the 1960s. The number of people living in areas with severe stresses on water supplies will double from one-third of the world population to two-thirds between 1995 and 2025, the report says, as the water basins irrigating the crops of the North China plain are being exhausted. This makes a good case for agriculture science companies like Monsanto (NYSE:MON), which are creating drought-resistant and yield-improving seeds.

And finally, the Telegraph columnist adds that HSBC considers the economic projections a ”rather rosy scenario,” that leaves one thing clear: As superpowers of world food output, the U.S. and Canada are in great shape to succeed and lead.

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