The World’s Economies

This short guide looks at the relevance of the global economy to people living, working or doing business in a country that is not their own. It also looks at reliable places where you can obtain further information about the countries of interest to you.

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This guide is not a country-by-country analysis of the world’s economies. Nor is it a projection of where those economies are likely to go.

Most people who are thinking of moving to another country – either for retirement, or to work, or who are thinking of investing in another country, or who would like to do business in another country instinctively realise that they ought to know something about the economy of the country concerned.

It’s not so many years ago that gathering any reliable information was next to impossible. In the era before the World Wide Web and email it meant writing to officials in many different countries. They would seldom reply without being chased (several times) and, when they did reply, the information supplied was often dubious or simply did not answer the question that you had asked. The process took months and the results were far from reliable.

Today, the process appears to be much more straightforward. A mass of information is published on the internet and there is even more commentary from people supporting or casting doubt on the data provided.

All of this is a good thing but it is worth remembering, with all these figures, that there are many countries that still do not provide robust data. Sometimes this failure is down to political motives. Other times it is because the data is not collected in any systematic way in the country concerned. On other occasions the data is treated in the country as of little importance because the western model of measuring economies doesn’t fit very well with the way in which they lead their lives.

In many of the poorest countries of the world, measuring what they do in monetary terms is either very hard or just doesn’t make sense. In a world where families labour for the common good (rather than for cash or other payment) and where many transactions are by way of barter, it is hard to put a figure on the value of the work being undertaken and so on the size of the economy.

Yet for anyone wanting to get involved in another country, there is a natural desire for some information about what is going on in financial terms in that country and how what is happening will impact upon your plans.

This guide will try to point you in the right direction when it comes to finding this information.

The size of the world economy

Even taking these limitations into account, the world economy is enormous. With over 7billion people, so it should be!

If you take the official figures for GDP in ‘Purchasing Power Parity (PPP)’ terms lightbulb image - hover here for more information on this subject, the value of the world’s economies is well over US$100trillion (2015).

It is growing incredibly rapidly as many emerging nations, led by China and India, have reached the stage where their economies are booming.

The world has over 10million US dollar millionaires, over 1,500 US dollar billionaires and about 3.25billion people who earn less than US$2 per day: nearly half the world’s population.

To find out the details about the country or countries of interest to you, there are a number of good websites. I prefer the CIA World Factbook.

The world’s biggest and fastest growing economies

It is well worth while looking at the relative positions of the world’s leading economies over the last 50 years.

For many people it will be just as interesting to know which economies are growing fastest as it is to know which economies are the biggest. The info below is from the International Monetary Fund (IMF).

RankCountry2018 GDP value (PPP) in millions US$CountryReal GDP growth rate (%)
1 China25,238,563 Libya55.1
-- European Union21,998,468 Ethiopia8.5
2 United States20,412,870 Vietnam7.7
3 India10,385,432 Ivory Coast7.6
4 Japan5,619,492 India7.5
5 Germany4,373,951 Iraq7.2
6 Russia4,168,884 Malaysia7.2
7 Indonesia3,492,208 Bangladesh7.1
8 Brazil3,388,962 Djibouti7
9 United Kingdom3,028,566 Cambodia6.9
10 France2,960,251

These figures, however, only reflect the official economy. They take little or no account of massive global industries such as drugs and prostitution and barely reflect the economic activity within families or villages where the reward for working is not cash.

Opportunities in the smaller economies

Biggest is not always best. You may be interested in a particular country precisely because it is not an economic giant with all of the lifestyle issues that tend to go with that.

If you are interested in another country because you wish to live there in retirement, you will have a completely different set of expectations. However, if you’re looking to invest or do business, you will be interested in how the economy is performing. There are many countries performing remarkably well and offering lots of business opportunities which are, at least for the time being, nowhere near the top ten biggest economies. Countries such as Mexico, Turkey, Czechoslovakia, Poland and Malaysia appeared in Bloomberg’s recent analysis of the most attractive emerging markets.

If you’re going to be moving to another country to work or doing business in another country, it’s well worth spending quite a lot of time on checking out the figures.

One country, two economies?

Many people will find that there are two economies in the country of interest to them.

There is an economy for wealthy local people (and most foreigners living in the country) and a completely different economy for ordinary local people.

Wealthy locals may have a standard of living far higher than a similar person would enjoy in (say) France or Germany. But the huge mass of local people could well be earning only US$2 per day.

Most foreigners living in the country will find the economy closer to that experienced by wealthy locals. They may find the cost of living – particularly for items they wish to import from their own country – far higher than the official figures might suggest and that their income does not go nearly as far as they had expected.

Ecuador is a good example. If we refer to the CIA World Factbook, in 2018, Ecuador was 64th in the list of world economies ranked by GDP lightbulb image - hover here for more information on this subject. That puts it about two thirds of the way up the list. Its GDP was US$190.7billion.

Measured in terms of its GDP per capita, the position is even starker. It is 137th in the world at around US$11,200 per head. Compare that with US$90,500 per head in Singapore, US$59,500 in the United States and US$53,600 in the Netherlands.

Yet many expats living in Ecuador will find that neither their lifestyle nor the cost of living reflect those numbers.

An alternative view, often useful to foreigners going to live in a country, is the Cost of Living Index, published by Numbeo or the US military calculation used when paying local overseas living allowances. This, reflecting the cost of living in places as an American, puts the cost of living in Ecuador as nearly as high as in France.

Statistical indicators

There are a large number of statistical indicators available on the internet. Treat many with suspicion. For reliable and consistent advice, try the sites listed below.

Sources of further information

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