Friday, 1 December 2017

The Fastest Growing Economies of 2017

ethiopia highways road

After the economic crises of 2008, almost a decade later, major emerging nations and developed economies are yet to recover from the doom shocks. A double-digit growth which was dominated by countries like China, Ethiopia, and Qatar seems like an impossible task at least for next five years from now. Emerging Asian and African countries lead with fastest GDP growth in the world. In the Americas, scandal-hit Panama leads in GDP growth despite the economic slowdown.

In the decade of boom and bust, from the year 2008 to 2017, the transformational human development shift has been witnessed by countries like Nauru, Ethiopia, Turkmenistan, China, Uzbekistan, Laos, and India. Nauru, a tiny island in Micronesia has witnessed an astonishing average yearly growth of 16% in this decade, suggests IMF report. Nauru’s boom was fuelled by GDP growth of 34.2% and 36.5% in year 2013 and 2014 respectively. The tiny island is a high fluctuating economy (common with micronations and war-torn zones) with GDP growth of just 4% in the current year.

The IMF data shows that Ethiopia, which maintained two-digit growth for years and throughout 2011, suffered a significant deceleration in 2012, and after recovering in the 2013-2015 period, lived a major slowdown in 2016 when growth estimates were of 6.5 percent. IMF expects the economy to Ethiopia to stable at 7.5% in current year.

The energy-rich economies of Turkmenistan and Qatar known for its consistent double-digit growth. The demand for Gas as an alternative to Diesel is on the rise. More countries like India, Russia, and China are keen to develop a Gas pipeline which would boost the growth in upcoming years. 

Turkmenistan’s GDP is expected to grow at 6.5%. The blockade led by Saudi Arabia and the United Arab Emirates has hit hard on the Qatar economy which GDP estimates of 2.5% in the current. Qatar grabbed the attention of economists in 2006 and 2010 with the GDP growth of 26.2% and 19.6% respectively.

Economies with more than 6% GDP growth projection in 2017


Ethiopia
8.5%
Myanmar
7.5%
Nepal
7.5%
India  
7.0%
Djibouti
7.0%
Bangladesh
7.0%
Cambodia
6.9%
Côte d'Ivoire
6.9%
Laos
6.8%
Tanzania
6.8%
Philippines
6.8%
Senegal
6.8%
China
6.8%
Guinea
6.7%
Turkmenistan
6.5%
Vietnam
6.5%
Burkina Faso
6.4%
Tanzania
6.4%
Rwanda
6.2%
Uzbekistan
6.0%

The ray of hopes, China and India have cushioned the global economy from a drastic fall. With the large resource pool and growing middle-class, China and India will continue to invest heavily in upgrading its infrastructure. Though, a worrying trend for the world economy is that economists predict China to grow around 6% for the next two decades. China has invested billions of Yuans of investment in its infrastructure and diplomatic soft loans to African nations, Sri Lanka and Pakistan. If China fails to maintain its fiscal deficit, it could trigger a global economic crisis.

India is the only ray of hope in this era of uncertainty. But India’s track record in maintaining high growth is not good. Democratic values, the rule of bureaucracy and federalism are among the things that keep manufacturing away, a trend in EODB suggest. Critics say that India is always that country which the world and its citizens expect to take off, but it never does. After the revolutionary reforms of GST and Demonetisation, India’s economy will be back on track with approx. 7% GDP growth by March 2018. Ministry of Finance, India estimate suggest that India would grow near 8% for around 3 to 4 years. In the current state of global economy, double-digit growth seems to be a magic number and I am still optimistic. The major overhaul of the tax structure, infrastructure investments, and renewable energy generation could boost India’s economy to double-digit soon.

- Chaitanya Kulkarni

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