Non-OECD countries to boost global population to 9.5 billion people by 2045

The global population is set to increase by 1.6 billion between 2021 and 2045, from 7.9 billion to 9.5 billion. Population growth in the non-OECD region accounts for over 96% of the expected total increase, with the OECD accounting for under 4%. The global working-age population (aged between 15 and 64) is anticipated to expand by 870 million throughout the projection period. Overall, the relative share of the global working age population is set to fall slightly, from 65% in 2021 to 63% in 2045. Urbanization is forecast to expand further in the coming decades, with 66% of the world’s population projected to live in cities by 2045.

Global GDP is set to increase by 3% p.a. on average over the period 2021–2045

The medium-term economic growth dynamic will be influenced by the outcome of the COVID-19 pandemic, the inflationary trend in connection with financial tightening, and the consequences of the Russia-Ukraine conflict. Towards the end of the medium-term period, Gross Domestic Product (GDP) growth will settle at 3.1%. Within the OECD, economic growth is forecast to average 1.7% per annum (p.a.) for the period 2021–2045. Global growth through to 2045, estimated at 3% p.a. on average, will be largely driven by non-OECD countries. These countries are expected to expand by 3.8% p.a., primarily through improving labour productivity and a growing working age population.

The global economy in 2045 will be double the size it was in 2021

Based on 2017 purchasing power parity (PPP), global GDP is projected to rise from around $133 trillion in 2021 to almost $270 trillion in 2045. China and India alone will account for 37% of global GDP in 2045, whereas the OECD will account for slightly less at 34%. OECD Americas is forecast to remain the region with the highest GDP per capita, followed by OECD Europe and OECD Asia-Pacific. The regional grouping of Middle East & Africa (excluding OPEC Member Countries) will still have the lowest GDP per capita and it is expected to be the only region where the average income is less than $10,000 (2017 PPP) in 2045.

In times of high uncertainty, policy focus shifts to energy security

The cover decision of COP26 – the ‘Glasgow Climate Pact’ – highlighted the need to enhance action across the world on climate change mitigation, adaptation, finance and increasing cooperation. Parties to the Paris Agreement were also called to update 2030 emission reduction targets before COP27. Yet, in the current geopolitical context, besides a pressing need to increase climate ambitions, countries are increasingly focused on energy security issues. There is now more attention on an energy sustainability trilemma, related to affordability, energy security and reducing emissions, evidenced in many countries publicly recognizing the need for inclusive and resilient approaches, including through more investments in oil and gas projects going forward.

Technology will continue to play a vital role in shaping the future energy mix

The WOO assumes the continuous evolution of technology, which will continue to play an important role in shaping the future energy mix. Despite fast progress in the penetration of electric vehicles (EVs), internal combustion engines (ICEs) are expected to remain the dominant technology for both passenger and commercial road transport segments, with continuously improving fuel efficiency. In a similar vein, conventional aircraft engines will remain the leading technology in the aviation sector. The marine transportation industry has leaned towards the use of liquefied natural gas (LNG), complementing the sector’s 2020 cap on the sulphur content of fuel and an industry-wide ambition for emissions reduction of 50% by 2050. Gas has steeply increased its share in power generation in recent decades, while the penetration of renewables in power generation, with an emphasis on wind and solar, will rise throughout the forecast period, increasingly displacing coal. Hydrogen is widely recognized as a significant energy carrier for the future.