By contrast, South America's largest economy is booming thanks to an abundance of natural resources and fast growing exports to
CEBR chief executive Douglas McWilliams said: "
Other Asian economies also move up the ranking.
If European leaders fail to solve the debt crisis, the CEBR warned of a scenario involving "one or more countries leaving the euro, sovereign defaults and banks going bust and needing to be bailed out" which would reduce global growth next year to 1.1%.
The bulk of the economic growth will be in emerging economies.
"The world economy will not be in technical recession because even on our more pessimistic scenario we still expect positive growth," said McWilliams. "But the slowdown we are expecting will be a sort of double dip, and of course significant parts of the world are likely to be in recession – much of
World Economic League 2011 (Last year's position in brackets)
3. Japan (3)