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World Cross-Border Flows Seen Tripling by 2025 in McKinsey Study

The global cross-border flow of goods, services and finance could triple by 2025 as the strength of economies becomes driven more by international factors, according to McKinsey & Co. research.

Such flows reached $26 trillion in 2012, or 36 percent of gross domestic product, and could grow to between $54 trillion and $85 trillion over the next 11 years, the consulting firm’s research division said in a report published today.

Movements across borders contribute between $250 billion and $450 billion to global expansion each year, the equivalent of 15 percent to 25 percent of total growth, McKinsey said. Germany, Singapore and the U.S. are cited as the three most connected nations in a list of 131.

Future flows may be dictated by the rise of emerging markets, which now account for 38 percent of all cross-border flows, a tripling since 1990, the report said. Trade between developing nations has mushroomed to $4.3 trillion in 2012 from $200 billion in 1990.

To contact the reporter on this story: Simon Kennedy in London at skennedy4@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net Andrew Atkinson, Alan Crawford

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