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5 Fastest-Growing Economies in the World

World Money
5 Fastest-Growing Economies in the World

The world is on the road from recession to recovery, and economies in both advanced and developing countries are improving. Global activity and trade are strengthening, partly due to an increase in demand for imports in developed nations. According to the International Monetary Fund’s most recent World Economic Outlook (WEO), published in October 2013, global growth is estimated to be at 3.7 percent this year, predicted to increase to 3.9 percent in 2015. Though growth is slowing down in emerging economies such as Brazil, Russia, India and China (known as the the BRIC countries) – as they’re on the descent from cyclical peaks – many nations, including the USA, the UK and much of the eurozone, are set to beat 2013’s growth rates.

The WEO data tells us that emerging Asian and Sub-Saharan African countries are poised to top the charts in terms of rapidity of economic growth over the coming year. Most of these nations are poor – some of the poorest in the world – and the recent improvements in their economies are mainly driven by the sale of natural resources such as gas or oil to richer countries. Of course, this dependence on natural resources is not always a good thing, as it has been known to lead to corruption, a spike in inflation, and the impairment of non-resource industries. And the very nature of these resources is that they’re finite, which is an inherent concern. The economic growth of these countries, many of which are situated on the poorest continent on earth, has been know to have an effect on neighbouring countries and trade partners, leading to sometimes unpredictable economic developments.

The following countries are ordered by percentages which reflect the projected growth of their Gross Domestic Product in 2014, according to the World Economic Outlook.

5. The Democratic Republic of the Congo – 10.5%

diamonds

The Democratic Republic of the Congo is located in central Africa, and is the second-largest country in the continent. It has a population of approximately 75.5 million. Though the Congolese people are among the poorest in the world, with an extremely low quality of life, the DRC is thought to be the richest country in the world in terms of natural resources. It earns most of its revenue from mining, and the smuggling of minerals is used as a means of financing war in the eastern provinces of the Congo. It is a major exporter of diamonds and copper and the largest producer of cobalt ore on the planet. When resource prices dropped in the 1980s, the country’s economy suffered badly. It’s now rapidly improving, thanks to increased investor interest and productivity in mining, agriculture, trade and construction.

4. Mongolia – 11.7%

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Mongolia is a landlocked nation in Central Asia. It’s home to less than 3 million people and is the most sparsely populated independent country in the world. Approximately 30% of its citizens are nomadic. Economic activity in Mongolia was traditionally based around farming, but in recent years it has begun to exploit its substantial mineral resources, which include copper, gold, coal, tin and tungsten. Many of these minerals, which make up over 80% of the country’s exports, are sold to neighbouring China. Chinese, Russian and Canadian companies have also set up mining businesses in Mongolia. The nation’s GDP rocketed from 6.4% in 2010 to 17.5% in 2011. Its GDP still remains very high, though it is gradually decreasing and is estimated to be down to 6.2% by 2018. The country has struggled to deal with its rapid economic growth and the changes associated with it. Pollution, economic equality and urban poverty are rife, as large numbers of once nomadic people migrate to the expanding cities.

3. Sierra Leone – 14.0%

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Sierra Leone is a country in West Africa with an estimated population of just over 6 million. Like the Democratic Republic of the Congo, the citizens of Sierra Leone live in destitution despite the fact that their nation is rich in mineral resources. It is one of the top diamond producers in the world and has vast deposits of gold, iron, titanium and bauxite. The economy was severely damaged by a long and brutal civil war, but since the end of hostilities in 2002 the country has begun to get back on its feet. A shift in emphasis from agriculture to construction and mining (particularly of iron ore), efforts to increase the efficiency of resource exportation, reforms aimed at fighting corruption and reduced government spending have all led to huge increases in Sierra Leone’s annual GDP. Real GDP growth shot up from 6% to 16.7% in 2012 and has since remained very high.

2. Libya – 25.5%

LIBYA

Libya is a country in North Africa which is bordered by the Mediterranean Sea. It has a population of 6.5 million and boasts one of the highest standards of living and GDP per capita in the continent. Its wealth is largely due to its significant oil reserves: oil represents 97% of the country’s exports. This dependence on oil has led to huge fluctuations in the country’s GDP over the past few years: disruptions in production in 2011 saw it drop to -62.1%, while a rapid return to pre-war production levels in 2012 brought the GDP soaring up to 104.5%. A lack of diversification in the economy is just one of Libya’s many problems. Two years after the death of Muammar Gaddafi, the country is still recovering from civil war and exists in a state of uncertainty. The current government is focusing on restoring national security, encouraging economic growth, disbanding militias and improving services and institutions.

1. South Sudan – 43.0%

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The Republic of South Sudan is a country in northeastern Africa with an estimated population of 8.3 million. It became an independent state in 2011 following a peaceful referendum. South Sudan has a severely underdeveloped economy, with a major lack of infrastructure. It struggles to provide basic services to its people and has the highest maternal mortality rate and lowest female literacy rate in the world. The country is plagued by civil war and conflict with other nations. Like Libya, it’s almost entirely dependent on oil for its revenue, which has led to numerous problems. Following a dispute with its neighbour Sudan, South Sudan put a halt to its oil exports in January 2012. This devastated the economy, causing the GDP to plummet to -47.6% and driving inflation up as high as 80%. After the resumption of oil exports in 2013, the GDP has quickly begun to return to normal. However, it is thought that if no new finds are made, South Sudanese oil reserves will be seriously diminished by 2020. The country desperately needs to diversify its economy in order to survive. Yet, perhaps given our current dependence on oil internationally, the IMF predict this will be a year of rapid economic growth for South Sudan.

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