The records say that there is a downgrade of the world’s total GDP for 2016 from a January prediction of 3.4% to a 3.2 %
However, first world economies have had evidence of growth, despite being a lot slower than many would hope.
Significant events/factors which have slowed down the global economic growth are:
- The Chinese economy is suffering a slowdown.
- The drop in oil prices, mainly taking its toll on nations like Russia and the Middle East.
- There is also a significant slowdown in markets that are merging.
- The increase in terrorism, immigrants, and international aid.
- The wars in Syria, Libya, Ukraine, and other Middle Eastern areas.
- Cold War tensions between USA and Russia, consequently resulting in sanctions and exclusions.
Although heightened world mishaps have broken out, this doesn’t mean that everyone has been suffering.
The world’s fastest growing economies:
The IMF has reported Myanmar to be the world’s fastest growing economy currently, with an estimated GDP growth set at 8.6% for this year.
The country has experienced reforms economically and politically; making headlines all across the world. Myanmar has high confidence from both consumers and investors.
Typically, numerous small countries in the Middle East and Africa are going through this same pattern of transition, nations like:
- Ivory Coast
Why are small countries experiencing a spike in growth?
Many of these developing nations have managed to become a democracy, from previously being under military rule – this has allowed for an increase in exports and for new foreign investment and markets to emerge.
However, poverty and inequality are still rife in these countries.
How about fast growing first world countries?
For this year, advanced economies expected to project 2% growth – not including Japan. India has been enjoying great prosperity, with GDP reaching over 7%.
There is a public outcry of China’s slow turn, but since moving to service and finance markets from manufacturing, growth for that nation has been forecasted to grow by 6% – IMF figures are looking to increase for 2017.
But it must be mentioned that both imports and exports are still down in China, which is having a knock-on effect on foreign economies.
The world’s slowest economies:
This nation’s economy is energy-dependent and has been burnt by the 2014 Oil crash – while currently experiencing a civil war.
Domestic troubles for Yemen include:
- High unemployment.
- An accelerated population boom.
- Stern famines.
- A decline in water resources.
Another economy reliant on the energy market so has suffered from the result of falling oil prices. Also, they have increased spending on the military, have sanctions imposed by the USA, government interference with the private sector and fundamental issues.
However, for 2017, Russia is predicted to grow its GDP by 2.5%.
Many factors have caused Brazil’s frail economy to fracture, these include:
- The government’s attempt to revive economic growth, by making cuts for industry and incentives to household consumption.
- Brazil’s current account and fiscal balances have decayed.
- The World Cup in 2014 was also a burden to the economy.
This nation has still been left behind from the recession in 2008, which has not been able to bring down its unemployment rate, encourage foreign investment and lack of regional development.
GDP shrank by 0.4% in 2014.
Similar to Croatia, Serbia has never brought down the unemployment rate since the global recession – while household incomes have remained stagnated, and structural reforms have been an ongoing delay.
Other domestic issues in Serbia:
- An aging populace.
- Extremely high levels of corruption.
- An ineffective judicial system.
This country experienced a devastating blow to its tourist-dependent economy after the recession hit, and it has never been able to recover since. Even airlines have cut the frequency of flights to go there.
It is always vulnerable to a decline in tourism when the global economy slows down.
This nation’s GDP fell by a staggering 24% in 2014, despite the government taking significant sums of money from energy supplies – the fatal error being no investments helping into a developing economy.
Libya also experienced a civil war in 2011.
The primary cause of the 24% fall was by the war and major protests causing disruptions to oil ports around the country.
Initially, the economy took its first hit when the financial crisis initiated. It did manage to bounce back in 2010 but was then devastated again after Russia annexed Crimea (causing GDP to fall by 6.8% in 2014).
Lack of reforms and political corruption is still holding the country back from any future growth.
What to expect for the rest of the year…
Despite growth only reaching a 3.1% rate for this year, it is still moving in the right direction – which is surprising considering all the challenges that face the world. Emerging economies will continue to speed ahead while other corners of the world will be devastated by war and commodity prices.
- Oil prices to now rise in value.
- 2017 is forecasted to grow by 3.4%.
- Foreign relations are making improvements.