Economic Growth - Statistics Project Example

Economic Growth Statistics YourFirst YourLast Comparing BRICS, PIIGS and PINE BRICS From the year 1990, the BRICScountries economic growth has far outperformed that of the biggest economy in the world – the United States – and that of the EU (European Union). As a result, the countries that make up the BRIC block have been regarded as a universal emblem of a change in the world’s economy, further away from the traditional G7 nations towards the emerging world. All the four countries that make up the BRICS – Brazil, Russia, China and India have had positive economic growth rates, numbers that have outperformed the US and the European Union and other western economic powers (Finardi, 2014). Economic indicators point towards positive economic growth trends in the next few years, as growth is estimated to remain well above 11% for the four nations. The Size of the BRICS Brazil Russia India China South Africa Population 198.4 141.9 1,223.2 1,354 51.2 GDP (2012) 2,396 2,022 1,824.8 8,227 384.3 GDP per capita 11,875.3 17,708.7 3,829.7 9,162 11,375.3 Inflation (2012) 5.8 6.6 11.2 2.5 5.6 GDP Growth (2002-2012) 3.5 4.7 7.2 10.3 3.5 Source: International Monetary Fund The BRICS are normally clustered together for the reason that each nation is regarded to be at a comparable phase of freshly advanced economic growth and development. Economic growth for these countries is propelled by the capability of each nation to modify its individual political governing system and adopt capitalism. Additionally, each country contains huge deposits of natural resources and outsized populations. Altogether, the four BRIC nations cover above 25% of the global land mass has over 40% of the global population and makes up for around 17% of the global economy. In spite of the fast economic progress, each of the BRIC nations currently accounts for a big part of the global GDP; China’s GDP in 2014 was $10,380.39 billion, and it accounted for the second largest economy in the globe, behind the US. Brazils GDP was $2,353.03, and was ranked seventh in the world. India and Russia ranked 10th and 11th respectively with the economic numbers averaging $2,049.5 and $1,857.56 respectively. According to the GDP numbers of the BRICS, their added economies could surpass the pooled economies of the existing most wealthy nations by the year 2040. Given such a situation, it has been projected by economic thinkers that China together with India will both turn out to be the world’s leading providers of manufactured merchandise, with the other two countries – Brazil and Russia – becoming the dominant global suppliers of the much needed capital goods. Brazil is renowned for producing iron ore and soy. The country is also tipped to have massive oil reserves while Russia is the world’s leading source of energy, both gas and oil. IMF Economic Growth valuations for Major Global Economies Source: International Monetary Fund PIIGS PIIGS is an acronym used to denote the economies of Portugal, Ireland, Italy, Greece and Spain. These nations were grouped together because of the difficulties they encountered in their respective economies in the wake of the global recession of 2008 to 2009. All the members of the PIIGS family belong to the EU (European Union). These nations became a cause for worry within the EU for their growing national debts, particularly with Greece spearheading the group as the most indebted nation within EU (Zhao, Zhang & Qi, 2011). Greece became entangled in a scandalous affair after reportedly fabricating its public economic and financial information. By the year 2010, it had become apparently certain that all the five nations were in need of a financial bailout, each in her own capacity. Real European Output Growth Per Capita 2008 – 2013 (%) 2014 – 2019 (%) Greece -23.8 +15.0 Ireland -11.2 +11.3 Spain -10.1 +4.6 Italy -9.2 +4.7 Portugal -7.0 +8.2 UK -3.4 +7.7 France -1.9 +4.9 Germany +4.2 +9.2 Source: International Monetary Fund, Cebr Analysis Analyzing the past economic events, the members of the PIIGS group found themselves in serious economic problems because of the sovereign debt. Sovereign debt is debt gotten from another country using the lender’s medium of exchange. Many countries practice this kind of economic bailout for raising money to fund their own economic activities, especially when the borrowing country’s currency is weak or unbalanced. The method is common among the western countries, however, there are major drawbacks with this method, key among them, the inability of the borrowing nation to pay promptly, running the risk of defaulting. At the time these countries were seeking these funds, they had been branded as the weakest link in Europe. Size of the PIIGS Country Population Size in SQ Miles GDP % of the world Italy 61,261,254 301,340 2.34 % Spain 47,042,984 505,370 1.79 % Portugal 10,781,459 92,090 0.32 % Greece 10,767,827 131,957 0.37 % Ireland 4,722,028 70,273 0.23 % In the EU, Portugal’s economy is ranked at number 17. Even though the nation’s debt is less than that of the US, its debt levels have tripled in the recent past, rising to almost 20%. Additionally, the Portugal’s unemployment rate has reached double figures, buoyed by the minor economic recession of 2009. Even though the Italian economy is positioned number four in the European Union, the economic recession of 2009 pushed it backwards by approximately 4.5%. Currently, the country’s debt ratio in relation to the real GDP is approximated at 119.5%, with an average unemployment rate of 7%. On the other hand, Ireland, who originally was not part of the PIIGS used to be ranked highly in the global economic front. However, 2009 was the year that Ireland would succumb to economic catastrophe. In 2009, Ireland’s dropped its economic strength by an averaged 7% (Brazys & Hardiman, 2014), and subsequently tripling its national debt from 25.4% while the average population looking for employment reached 13.5%. These statistics have since rendered Ireland fully qualified to join the PIIGS group of countries. Greece is a country that has enjoyed its fair share of economic progress and decline in equal measure. Initially, Greece had outperformed other European Nations economically, especially after hosting the Olympics and the European football tournament in mid-2000. However, the country had heavily borrowed to finance the operations of the games, and once the games were over, the country was left to pay the money borrowed to finance the games, while at the same time; their stadiums had become a perfect case of white elephants. The 2009 global minor recession proved the breaking point for the country, whose national debt currently stands at 125% of its GDP. Even though ranked at position thirteen in relation to the size of the economy, the country is ranked the poorest in the whole of Europe, with a debt larger than the size of their GDP. Spain is ranked at number five of the PIIGS in the Eurozone. It has the lowermost debt to GDP ratio among the PIIGS. Nonetheless, its GDP is below 66.3% and in addition, unemployment rate is said to be above 20%. Even though it is difficult to go back in time, it remains a question of “what if” this group of countries was left to battle the market forces alone, without the assistance of European Union stable currency or bailout. Regrettably, for these nations, the harm, even if triggered jointly or individually, is very huge. The national debt accrued by these nations in trying to bail out their economies has developed to a point where they can only be excused or restructured for these nations to at least make out something of their economies. PINE The PINE countries are four countries from the developing world. They are the Philippines, Nigeria, Indonesia and Ethiopia. It is said that these nations epitomize something very vital in the world’s economy, especially while striving to decrease global poverty levels (Schuman, 2014). It is because of the performance of their individual economies that these countries are considered the new face of global economic opportunities. For example, take the Philippines. At the time most Asian nations were surging forward economically, for example, Malaysia and Japan, the Philippines were left lagging behind. Buoyed by its large population, many Filipinos went abroad in search of a better living. Currently, Philippines have one of the largest numbers of citizens living in the diaspora. Currently, the country boasts one of the fastest growing economies, averaged at 7.5% going by the current IMF figures. In the 1990’s, Indonesia was a strong economic performer, but political unrest took center stage and the fighting and rebel movements forced local and international investors out of the country. The lengthy fighting between the government forces and the local rebels left much of the country untapped and underdeveloped. But the country has slowly returned to its hey days after witnessing democratic elections in the recent past, and investor confidence has come back undeterred. FDI (Foreign Direct Investment) stood at approximately 19% in 2014 alone, signaling economic growth in the coming years. Ethiopia and Nigeria are two big countries in terms of their untapped resources. Once considered the country with the most learned individuals, Nigeria boasts of volumes of oil on the North Delta area. Having exchanged guard, the much needed reform will no doubt come at a time when it was needed most, with the new incumbent president. Ethiopia is also gaining momentum. Once regarded as a poverty destination in Africa, the country has enjoyed extended periods of peace and tranquility, a factor that has contributed positively to its growth in the recent past. References Brazys, S., & Hardiman, N. (2014). From ‘Tiger’ to ‘PIIGS’: Ireland and the use of heuristics in comparative political economy. Eur J Polit Res, 54(1), 23-42. doi:10.1111/1475-6765.12068 Data.imf.org,. (2015). IMF Data. Retrieved 7 June 2015, from http://data.imf.org/?sk=5DABAFF2-C5AD-4D27-A175-1253419C02D1 Finardi, U. (2014). Scientific collaboration between BRICS countries. Scientometrics, 102(2), 1139-1166. doi:10.1007/s11192-014-1490-5 Imf.org,. (2015). External Debt Statistics and the IMF. Retrieved 7 June 2015, retrieved from http://www.imf.org/external/np/sta/ed/ed.htm Schuman, M. (2014). Forget the BRICs; Meet the PINEs. TIME.com. Retrieved 7 June 2015, from http://time.com/22779/forget-the-brics-meet-the-pines/ Zhao, Y., Zhang, Y., & Qi, C. (2011). The Estimation of the Fiscal Policy Stance in the PIIGS Countries. International Journal Of Trade, Economics And Finance, 120-124. doi:10.7763/ijtef.2010.v2.89 Read More