The Five Fastest Growing Economies In The World
The coronavirus pandemic has impacted this year's growth around the world. Although the gross domestic growth (GDP) rates of nations oscillate beween the extremes of 26.21% and –66.65%, global growth is projected to be –4.4% in 2020.
Based on IMF data for 194 countries, only 16 countries will grow at 1% or more. The growth rates of 11 nations will hover between zero and 1%, but an astonishing 167 nations will see a contraction in GDP growth.
Out of the sixteen economies in the trillion-dollar club, only China’s GDP is projected to grow in 2020.
That makes growth a rarity; so let's take a look at the five fastest growing economies in terms of growth percentage in 2020.
With a projected 26.21% growth in 2020, Guyana is the fastest growing economy in the world. Guyana’s growth is expected to come in at:
- 12% in 2021
- 49% in 2022
- 28% in 2023
Its GDP of $6.81 billion (2020 Rank: 150) is expected to more than double by 2025 to reach $14.08 billion. Guyana is a middle-income country and is covered by dense forests, and is home to fertile agricultural lands and abundant natural resources. Gold, bauxite, sugar, rice, timber, and shrimp are among its leading exports.
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. Several companies have been involved with exploration and drilling activities over the years, including:
- ExxonMobil (XOM)
- Hess (HES)
- Repsol (REPYF)
- Total (TOT)
- Tullow Oil (TUWLF)
- CGX Energy (CGXEF)
ExxonMobil made the first commercial discovery in Guyana in 2015 and started production in December 2019; in September 2020, ExxonMobil has made its 18th discovery offshore Guyana at the Redtail-1 well. Guyana is projected to be among the world's largest per capita oil producers by 2025.
South Sudan is a young country that gained independence in 2011. The country has been hit hard by a civil war and falling oil prices since December 2013. In mid-2016, South Sudan relapsed into war, which severely affected economic activities and worsened the humanitarian crisis and food insecurity.
However, the peace agreement signed in September 2018 has rekindled hope for peace and economic recovery, along with the reopening of some damaged oil wells, which are its main source of revenue. The economy of South Sudan contracted by 13.48% and 5.77% in 2016 and 2017, respectively. The pace slowed further in 2018 and finally in 2019, it entered the positive zone with a 0.87% growth. The economy is poised to grow by 4.11% in 2020 with its GDP at $4.18 billion (Rank: 156).
“South Sudan has registered positive economic growth. However, in order for growth to have more impact on the lives of ordinary citizens, a significant portion must be reinvested in improving food security and basic service delivery,” says Husam Abudagga, the World Bank Country Manager for South Sudan.
The economy of South Sudan is expected to shrink by 2.27% in 2021 and is expected to witness growth of close to 1% in 2022 before picking up the pace by 2.98%, 5.49%, and 5.42% in 2023, 2024, and 2025. The country is still combating high inflation and its future remains precarious amid threats to its peace agreement.
Bangladesh has emerged as a strong economic growth story. The country experienced an average growth of 7.6% in the past four years (2016-20) and is set to grow at 3.8% during 2020.
The World Bank estimates that Bangladesh will become a middle-income economy by 2021: 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 remarkable progress in reducing poverty levels from 44.2% in 1991 to 14.8% in 2016-17, and has seen significant improvement in literacy rates, life expectancy, and food security.
Bangladesh was an $8.75 billion economy at the time of its independence. Its GDP for 2020 is estimated at $317.44 billion (Rank: 41) and should around $490 billion by 2025. A stable macroeconomic environment, buoyant domestic demand, and export-oriented industry-led growth have placed Bangladesh among the fastest growing economies. It is expected to see 4.4% in 2021, followed by an average growth of 7.46% during 2022-25. According to the Asian Development Bank (September 2020 Outlook), Bangladesh is expected to grow at 5.2% and 6.8% in 2020 and 2021, respectively.
Best known for its great pyramids, Egypt’s majesty has long entranced archaeologists and historians. Its economy has grown stronger in recent years, led by an upswing in tourism, strong remittances from Egyptian workers abroad, and new natural gas field discoveries. In September 2020, Eni (E) and BP (BP) announced a new gas discovery in the so-called “Great Nooros Area,” located in the Abu Madi West Development Lease, in the conventional waters of the Nile Delta offshore Egypt.
During 2018 and 2019, its economy grew at 5.31% and 5.56%, respectively. Despite the impact on its economy by the sudden stop in tourism, fall in exports, drop in remittances, and lower revenue from the Suez Canal, Egypt will manage a growth rate of 3.55% during 2020. Its economy will expand at 2.76% next year before returning to a higher growth of an average 5.28% over the four-year period 2022-25. Its GDP for 2020 is projected at $361.88 billion (Rank: 34).
Benin, officially the Republic of Benin, is characterized by a great diversity of landscapes and ecosystems. According to the World Bank, Benin's economy is heavily reliant on the informal re-export and transit trade with Nigeria (estimated at approximately 20% of GDP), and on agriculture. The African Development Bank Group highlights that Benin remains highly exposed to changes in the trade and currency policies of Nigeria—Benin’s leading trading partner and the recipient of 51% of its exports.
Benin has been carrying out key economic and structural reforms, which have helped it clock an average growth of 6.41% during the last three years (2017-19). Public investment has increased from 21% of GDP in 2016 to 29.6% in 2019. Benin, one of Africa’s largest cotton producers, has witnessed its agricultural production increase from 269,222 tons in 2016 to 726,831 tons in 2019. Inflation has remained under control; however, poverty remains high. The economy of Benin is expected to grow at 2% during 2020 to $15.29 billion (Rank: 120). The economy is projected to clock 5% growth in 2021, followed by an average growth of 7% during 2022-25.
Rounding Out The Top Ten
Beyond the five mentioned above, the next five fastest growing economies are:
- Myanmar (1.99%)
- Rwanda (1.99%)
- Ethiopia (1.95%)
- Tanzania (1.9%)
- China (1.85%)
As noted before, China is the only trillion-dollar economy projected to expand in 2020.
The rankings are based on IMF data for growth rate released in October 2020. Nominal GDP is mentioned as GDP is at current prices, U.S. dollars. The growth rate is the annual percentages of constant price GDP are year-on-year changes; the base year is country-specific.
Disclaimer: The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration. The report has been carefully prepared, and any exclusions or errors in it are totally unintentional.
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