The 5 Fastest Growing Economies In The World
Escalating trade wars and slack investment in emerging and developing economies have been deterrents to global growth prospects. The world economy is expected to grow at 2.6% in 2019, the slowest in three years, before it is anticipated to expand again from 2020. Amid weak growth, there are eighty-two nations that will grow faster than the world economy while around seven nations will experience negative GDP growth in 2019.
Here’s the look at the five fastest growing economies in the world.
With a projected growth rate of 16.3% during the four-year period 2018-2021, Guyana is the fastest growing economy in the world. With a GDP size of $3.63 billion (2018 Rank: 160), a growth rate of 4.1% in 2018 and 4.6% in 2019, Guyana’s economy is expected to grow by 33.5% and 22.9% in 2020 and 2021 respectively.
With a per-capita income of $5,194, Guyana is a middle-income country and is covered by dense forest. It is home to fertile agricultural lands and abundant natural resources. Gold, bauxite, sugar, rice, timber and shrimp are among its leading exports.
Back in 2000, the U.S. Geological Survey identified the Guyana-Suriname Basin as the second highest resource potential among unexplored oil basins in the world. ExxonMobil (U.S.), Esso (U.S.), Hess, Repsol (Spain), Anadarko (U.S.), Total (France), Tullow Oil (UK), and CGX Energy (Canada) have been a part of exploration and drilling activities over the years. ExxonMobil Guyana has made 13 discoveries since 2015 and plans to begin producing up to 120,000 barrels of oil per day from the Liza Phase 1 development in early 2020. Guyana is projected to be among the world's largest per-capita oil producers by 2025.
With a GDP size of $80.28 billion (2018 Rank: 70), Ethiopia is the fastest growing economy in Africa and the second fastest growing economy in the world. Ethiopia’s economy experienced strong, broad-based growth averaging 10.3% a year from 2006/07 to 2016/17, compared to a regional average of 5.4%. The country is projected to grow at 8.1% during the 2018-2021.
The reduced government public expenditure to tame growing current account deficit along with political uncertainty and foreign exchange shortages decelerated its economic growth to 7.7% 2017/18. The country is currently struggling with low per capita income but aspires to reach lower-middle-income status by 2025. To propel its economy forward, the government is implementing the second phase of its Growth and Transformation Plan (GTP II) to create the much-needed infrastructure to make Ethiopia into a manufacturing hub and attract foreign direct investment.
Rwanda is a small, hilly, landlocked and densely populated nation with a GDP size of close to $10 billion (2018 Rank: 143). The infamous genocide of 1994 decimated its economy resulting in an impoverished population and halting its development and investment process. Rwanda has bounced back since then. It has not only ensured political stability since 1994 but has rehabilitated its economy better than the pre-1994 period; its economic growth averaged 7.5% over the decade to 2017. Rwanda’s economic revival has been accompanied by substantial improvements in living standards and social development. Life expectancy has increased from 49 in 2000 to 66.6 in 2017 while poverty has reduced considerably from 60.4% in 2000 to 38.2% in 2016/2017, according to the World Bank.
The country now aspires to become a middle-income country by 2035 and a high-income country by 2050. The average growth for 2018-2021, based on projections, is 8%. Based on its strong growth, the country’s GDP will expand from $10.21 billion in 2019 to $15.81 billion in 2024.
Backed by an impressive track record for growth, Bangladesh is poised to become a middle-income economy by its 50th birthday. In 2018, the size of its economy fulfilled all three eligibility criteria for graduation from the UN’s Least Developed Countries (LDC) list for the first time. The country has made a remarkable progress in reducing poverty levels from 44.2% in 1991 to 14.8% in 2016/17.
Bangladesh was an $8.75 billion economy at the time of its independence. In 2018, its GDP was $287.63 billion (2018 Rank: 70) and is projected to expand to around the $500 billion mark by 2024. A stable macroeconomic environment (fiscal deficit below 5% of GDP), buoyant domestic demand and export-oriented industry-led growth have placed Bangladesh among the fastest growing economies. Bangladesh clocked an average of 6.5% growth over the decade and is expected to grow at an average 7.5% during the period from 2018-2021. The Asian Development Bank projects a higher growth of 8% for Bangladesh in 2019 and 2020.
India, the world’s third largest economy in terms of purchasing power parity and seventh largest in terms of nominal GDP, is also the only trillion-dollar economy to be in the top five. The World Bank observes that India’s “long-term GDP growth has become more stable, diversified, and resilient.” The Indian economy has seen significant progress since the early 1990s when economic liberalization was initiated.
India’s GDP has a 17% contribution from agriculture, fishing and forestry; industry has a 29% share with manufacturing making up around 16% of that pie and a 54% share coming from services. While India’s balanced and strong growth remains intact, it faces challenges such as uneven development, unemployment and a lower per-capita income compared to economies of the same size.
India is expected to grow at 7.4% during the period 2018-2021 supported by economic reforms, robust macroeconomics, domestic consumption, manufacturing push, demographic dividend and initiatives across sectors focused on growth. The $2.71 trillion GDP (2018 Rank: 7) aims to reach the $5 trillion mark by 2025, and become a high-middle income country by 2030.
Rounding out the Top Ten
Cote d’Ivoire (7.3%), Djibouti (7.1%), Cambodia (7.1%), Senegal (6.9%), and Mongolia (6.8%) are the next five fastest growing economies. China is the twentieth fastest growing economy with a projected growth of 6.2% during the four-year time period (2018-2021).
The rankings are based on the average growth rate for four years 2018-2021 (2018 estimates and projections for 2019, 2020 and 2021) growth rates are based on World Bank’s Global Economic Prospects June 2019 data.