Global economies are on the rise

Photo: Foundation for Economic Education

In this new decade, it has become apparent that there are many countries with economies that are growing rapidly and outpacing the rest of the world in terms of economic growth.

In 2019, the highest economic growth in a country was Ethiopia with an astonishing 7.9% of GDP growth. This growth is credited primarily to government investment in infrastructure along with agricultural and service sectors. Additionally, it appears that despite making up 70% of the workforce, the agricultural sector in Ethiopia has been dwarfed in GDP growth by the service sector. Most of the earnings made in the service sector was by Ethiopian Airlines. Apart from that, the country has continued exporting primarily coffee, but it has also begun exporting goods such as sesame and gold. And the Ethiopian economy continues to look strong, with a projected 6.7% of GDP growth in 2023. 

Another rapidly growing economy is the Indian economy. With a booming population of over one billion people, India’s GDP grew by 7.3% in 2019. Similar to Ethiopia, a substantial portion of India’s growth can be credited to the service sector. In India’s case, the service sector makes up just one-third of the labor force but two-thirds of its outputs. It has also risen as a major exporter in information communications, which includes software workers. And with more deregulations on the economy overtime, the Indian economic growth continues to remain strong. The projected GDP growth in 2023 in India is currently remaining strong at 7.2%. 

While its economic growth has been gradually slowing down over the years, China’s GDP is still growing at a rapid pace. Just like India, it has a population exceeding one billion people, and similar to India, its GDP growth in 2019 was 6.2%. Following economic reforms in the 1970s, China’s economy blossomed into a giant. For example, in 1984, the GDP growth in China hit a staggering 15.1%. While 6.2% is not anywhere near those numbers, it is still a strong, healthy GDP growth rate. But there have been consequences to this rapid industrialization and growth. China’s future growth is threatened by an aging population combined with growing economic inequalities. 

How does this compare to the United States GDP growth? Well, in 2019 the United States economy grew at 2.1%, and it is projected to grow 1.8% in 2021. But while this growth may be slower, it is certainly steady. Also, it should be considered that the United States economic growth has not been catalyzed in recent decades by rapid modernization or industrialization. 

It seems there is a trend with the newest global economic growers: they are riding off an economic boom created by their relatively recent industrialization. So, it will be interesting to see if this economic boom dies out in these countries soon after they have industrialized. 

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