Ghana, a West African nation is ranked the fastest growing economy in the world and tops the chart of the top 12 fastest growing economies for 2011. Liberia, Angola, Ethiopia, and Mozambique are other African countries that have been ranked in the group of fastest growing economies. The others are from Asia, while none of the developed economies have been projected for a strong growth in the group of 12.
For 2010, we noted that none of the top growth countries were advanced economies; only one was G20. Many people assume that China is the fastest growing country in the world, but that is not the case – it is the fastest growing largest economy, and as we will see that is a different thing.
While trends are following through as projected, you may be surprised at who is now leading the pack in terms of economic growth – not a country that is normally thought of in those terms.
As our source, we have taken a look at the data on the Economic Statistics database here at EconomyWatch.com. The data points come from the IMF’s tracker of GDP Growth in constant prices in the national currency (not converted to US dollars).
Growth rates are much higher this year. The chart tops out at over 20%. Last year we saw a projected high of 16.4% from growth leader Qatar.
Once again, developed countries do not feature in the Top 12. Almost half of the top 12 come from Africa. Ghana has swept from 4.5% last year, to an astonishing 20.146% for 2011.
One third of the Top 12 are from the Far East; two from the Middle East and one from Central Asia.
In 2010 there was only one G20 nation in the Top 12. This time India also makes the grade. This is the beginning of a larger trend. However India will not be without its own challenges as Chief Political Economist David Caploe points out here in his article India: One Child Policy?
What can we make of these trends? What is the reality behind the statistics?
1. The African decade continues to hold sway. 2010 to 2020 is bringing massive development to the continent. As China continues to boom we will see the Chinese offer more large-scale infrastructure development to African governments in return for natural resources and farmland to support it’s vast population. In turn African countries are continuing to challenge old perceptions of corruption and violence through practicing better governance. Chart leader Ghana is one of Africa’s strongest democracies. African countries will continue to veer in favor of increased prosperity. The picture continues to be replacement of Western aid for Africa by Eastern trade with Africa.
2. Who woulda thunk it! Energy is still Key. Not surprisingly energy continues to play a key role. We expect this trend to continue with the advent of “peak oil” and the continuing upward trend in oil and natural gas prices. Countries like Qatar and Azerbaijan with their huge natural gas and oil reserves will continue to boom.
3. Population growth. Rapid population growth is a key factor in economic growth. The countries with some of the highest rates of population growth in the world dominate the growth chart. As their economies mature, expect to see this trend slow down somewhat for these countries.
4. A low growth base offers more opportunity for expansion. This explains the lack of highly developed economies in the Top 12. As these markets contend with the credit crisis (or as Dr Dave likes to call it, the Loan Freeze), the ongoing costs of supporting an aging population and the law of diminishing returns will ensure that we will see much higher growth performance from economies that have more room to grow.
5. The peace and democracy bonanza. Rounding of our counter-intuitive list is another perfectly intuitive point. Countries like Ghana who are experiencing a new era of good governance will enjoy massive growth increases. Where there is peace and good governance, prosperity will follow as we see these countries making use of their resources more actively and using them to build, rather than wage war.
Underdeveloped economies will continue to surge ahead for 2011. Mercifully, for the majority of the world’s population, the gap between rich and poor seems to be closing. That’s at least three out of five for David’s Top Five Christmas wishes for the world Economy in 2009! Progress…
In summary, the top 12 fastest growing economies in 2011 are Ghana, Qatar, Turkmenistan, China, Liberia, India, Angola, Iraq, Ethiopia, Mozambique, Timor Leste (East Timor), and Laos in that order.
The original version of this article was written by Juan Abdel Nasser and appeared on Economy Watchwatch.com.
*Re-writing was done by The 4th Media.