Quick Bites | Global GDP Growth over Last Ten Years

Quick Bite – Global GDP Growth over Last Ten Years

Source: Voronoi, Visual Capitalist, IMF

Measured in real USD (rather than Purchasing Power Parity), the US remains far and away the dominant economy in the world, accounting for 28% of the global economy. The US remains more than double the size of China, and more than 5 times larger than Germany or Japan. But China is growing faster: China’s economy grew 74% since 2015, versus US growth of 28%, but a real estate crisis has stalled China’s growth in recent years. Ten years ago, economists had forecast that China would overtake the US as the world’s top economy, however the pandemic and the collapse in the real estate sector has since changed projections.

India’s rapid growth of 77% over the last 10 years has pushed it into the world’s top five economies, with projections showing it will surpass Japan this year and Germany by 2027. Ten years ago, the UK held the number 5 spot. Brexit has not been the boon to UK growth that some might have hoped for.

Amongst developing countries apart from India, Indonesia and Türkiye also saw impressive growth. For Türkiye, this is despite persistently high inflation since 2018 and a steadily depreciating currency (the lira). The laggard of this big 20 group, is Brazil. At 8% inflation-adjusted GDP growth, it is the only country with a single-digit figure. As a commodity exporter, the 2014 commodity price collapse affected Brazil badly, sending it into a recession. While recovery began, the pandemic had an impact as well, though now trade and investment are back at pre-pandemic levels. Indonesia is coming off a low base, but if it continues growing at around 5% per annum over the next ten years will see it moving up the charts.

Australia ranks 13th in the world and has grown by 25% over the last 10 years. This is somewhat disappointing, particularly when considering our proximity to the fast growing Asian region where China has grown 74%, India 77%, Indonesia 51% and South Korea 29%. With all our positive attributes (vast resources, educated population, robust public institutions, stable law and order, access to capital markets, etc), we should have done better.