The rate of economic growth each year is a critical indicator in nations around the world. In emerging market economies, growth matters particularly, since these economies often also have a fast-growing population to support. We wonder: Which country is expected to have grown the most in 2017?
A. India … is not correct.
India is expected to be the fourth fastest-growing economy in 2017, at 7.2%, according to projections from the World Bank and the World Economic Forum. It is also by far the most populous country among the world’s fastest growers.
Rising exports of goods and services, as well as additional government spending, are key drivers for India’s current growth.
India’s political leadership, under Prime Minister Narendra Modi, has promised big changes to spur economic growth – although some believe that the reforms might, in the short term, slow growth in 2017 more than expected.
But even if these measures succeed, India’s economic growth will still struggle to keep pace with its population growth. Without that, economic growth alone is unlikely to alleviate poverty and boost living standards.
Moreover, economic growth in India has tended to benefit the wealthy or the existing middle class, in a country where 60% of the population has to live on less than $2 per day. Inclusive economic growth, not just the rate of growth, will be the real test for India’s reforms.
B. China … is not correct.
China, the region’s other major power, no longer ranks (since 2010) among the ten fastest-growing economies in the world. Even so, over the course of 2017, its economy is expected to grow a respectable 6.5%, ranking 16th worldwide.
In 2007, 10 years ago, China was growing at 14.2%, the country’s highest annual growth rate since 1984. That performance has not been matched since.
China’s leadership preferred double-digit annual growth to keep its growing population well supplied and politically pacified. That was unsustainable, not least because a dynamically growing economy makes it very difficult to generate more growth year after year.
Previous slowdowns in economic growth were associated with events like the 1989 Tiananmen Square protests (when the Chinese economy grew by only 4.2%, down from 11.2% in 1988) and other disruptions, but such unrest was not repeated over the past decade.
With China’s population approaching its peak level in the next several years, it also might not be as important to keep economic growth extremely high.
China’s 2017 growth is grounded in strengthening domestic consumption, as well as renewed exports.
C. Myanmar … is not correct.
Myanmar is expected to be tied for seventh-fastest growing economy, at 6.9%, along with Cambodia and Philippines.
Apart from this, Myanmar’s fledging democracy, backed by the former ruling military elite, has been making news in 2017 for all the wrong reasons.
Impoverished Muslims from the Rohingya ethnic group are being violently deported en masse to neighboring Bangladesh, which is majority-Muslim, unlike majority-Buddhist Myanmar.
Myanmar on the whole is among the world’s poorest countries, so any economic growth in proportional terms is unlikely to translate into much improvement for the population.
The Philippines and Cambodia, in Southeast Asia, are expected to have the same growth rate as Myanmar this year. Both countries are led by strongmen committing widespread human rights abuses. Cambodia’s neighbor Laos will also grow quickly this year, at 7%.
D. Nepal … is not correct.
Nepal is likely to be the world’s third-fastest growing economy in 2017, with a projected growth rate of 7.5%.
The economy’s rapid progress this year stems from continued heavy spending on reconstruction after the devastating 2015 earthquake. Other factors include trade normalization with India and favorable (but not overwhelming) rains during the monsoon season.
South Asian countries appear among the top ten fastest-growing economies this year three times, while seven Asian nations in total dominate the list.
Nepal’s growth rate trails just behind the 7.6% projected growth rate of Uzbekistan, a former Soviet Republic in Central Asia. The World Economic Forum attributes Uzbekistan’s anticipated success — relatively overlooked — to rising oil prices, favorable market conditions in Europe, good relations with regional neighbors and more.
E. Ethiopia … is correct.
Ethiopia is expected to be the world’s fastest-growing economy in 2017, at 8.3%, according to the World Bank. The world’s total growth rate will be only 2.7%.
The biggest force in Ethiopia’s growth this year will be massive public investment in infrastructure development, particularly around water and energy, to support its large and rapidly growing population.
This infrastructure spending comes with a heavy public debt load for the government, however, so it will be important to sustain high economic growth in the coming years. Long-term drought across the country makes this a challenge.
Ethiopia is one of three African nations among the top ten this year – the others are Tanzania (7.2%) and Djibouti (7%). All of the world’s ten fastest-growing economies this year are located in either Asia or Africa.
As recently as 2004, Africa accounted for five of the world’s ten fastest-growing economies. Back in 1996, eight of the top ten were African economies.