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World Economy 2013
SOURCE: 2013 CIA WORLD FACTBOOK AND OTHER SOURCES
Page last updated on February 20, 2013
Economy - overview:
Fiscal and monetary data for 2012 are currently available for 180 countries, which together account for 98.5% of World GDP. Of the 180 countries, 85 pursued unequivocally expansionary policies, boosting government spending while also expanding their money supply faster than the world average of 6%; 47 followed restrictive fiscal and monetary policies, reducing government spending and holding money growth to less than the 6% average; and the remaining 48 followed a mix of counterbalancing fiscal and monetary policies, either reducing government spending while accelerating money growth, or boosting spending while curtailing money growth.
In 2012, fiscal policy shifted towards greater austerity for a majority of the countries. In an attempt to attack their deficit and debt problems head-on, nearly 5 out of 6 countries slowed the rate of growth of government spending, and 1 in 3 countries actually lowered the level of their expenditures. The global growth rate for government expenditures dropped from 5.9% in 2010 and 10.1% in 2011, to just 1.6% in 2012. Roughly 1 out of 3 central banks tightened monetary policy, decelerating the rate of growth of their money supply, and about 1 out of 7 actually withdrew money from circulation. Growth of the global money supply, as measured by the narrowly defined M1, slowed from 10.5% in 2009 and 10.4% in 2010 to 4.6% in 2011 and 6.0% in 2012.
These policy choices significantly affected economic performance. The global budget deficit narrowed to roughly $2.7 trillion in 2012, or 3.8% of World GDP. But growth of the world economy slipped from 5.1% in 2010, and 3.7% in 2011, to just 3.3% in 2012. And world unemployment increased to 9.2%.
Countries with expansionary fiscal and monetary policies achieved significantly higher rates of growth, lower unemployment, higher growth of tax revenues, and greater success curbing public debt than those countries that chose contractionary policies. In 2012, the 85 countries that followed a pro-growth approach achieved a median GDP growth rate of 4.9%, compared to just 0.8% for the 47 countries with restrictive fiscal and monetary policies, a difference of more than 4 percentage points. Among the 85, China grew 7.8%, Indonesia 6.0%, Mexico 3.8%, Russia 3.6%, Turkey 3.0%, the United States 2.2%, and Canada 1.9%, while among the 47, Brazil grew 1.3%, Germany 0.9%, France 0.1%, Belgium 0%, Netherlands -0.5%, Spain -1.5%, and Italy -2.3%. The median unemployment rate for the 47 countries jumped to 11.5%, while the median for the pro-growth countries held steady at 7.3%.
Faster GDP growth and lower unemployment rates translated into increased tax revenues and a lower debt burden. Revenues for the 85 expansionary countries grew at a median rate of 10.8%, whereas tax revenues fell at a median rate of 6.2% for the 47 countries that chose austere economic policies. This put increased pressure on many of the 47 to raise public debt. For these countries, the median level of public debt as a share of GDP increased 2.5 percentage points to 57.8%, while the median for the 85 pro-growth countries actually declined slightly (-0.1 percentage points).
The world recession has suppressed inflation rates - world inflation declined 0.8 percentage points in 2012 to about 4.2%. At the same time, the median inflation rate for the 85 pro-growth countries, at 5.5%, was 2.5 percentage points higher than that for the countries who followed more austere fiscal and monetary policies. The latter countries also improved their current account balances by shedding imports; as a result, current account balances deteriorated for most of the countries that pursued pro-growth policies. Slower growth of world income reduced import demand and crude oil prices fell. Consequently, the dollar value of world trade grew just 1% in 2012, compared with 18% in 2011.
Beyond the current global slowdown, the world faces several long-standing challenges. The addition of 80 million people each year to an already overcrowded globe is exacerbating the problems of underemployment, pollution, waste-disposal, epidemics, water-shortages, famine, over-fishing of oceans, deforestation, desertification, and depletion of non-renewable resources. The nation-state, as a bedrock economic-political institution, is steadily losing control over international flows of people, goods, services, funds, and technology. The introduction of the euro as the common currency of much of Western Europe in January 1999, while paving the way for an integrated economic powerhouse, created economic risks because the participating nations have varying levels and rates of growth of income, and hence, differing needs for monetary and fiscal policies. Especially in Western Europe, governments face the difficult political problem of channeling resources away from welfare programs in order to increase investment and strengthen incentives to seek employment. Because of their own internal problems and priorities, the industrialized countries devote insufficient resources to deal effectively with the poorer areas of the world, which, at least from an economic point of view, are becoming further marginalized. The terrorist attacks on the US on 11 September 2001 accentuated a growing risk to global prosperity, illustrated by the reallocation of resources away from investment to anti-terrorist programs.
Despite these challenges, the world economy also shows great promise. Technology has made possible further advances in all fields, from agriculture, to medicine, alternative energy, metallurgy, and transportation. Improved global communications have greatly reduced the costs of international trade, helping the world gain from the international division of labor, raise living standards, and reduce income disparities among nations. Much of the resilience of the world economy in the aftermath of the financial crisis resulted from government and central bank leaders around the globe working in concert to stem the financial onslaught, knowing well the lessons of past economic failures.
GDP (purchasing power parity):
$80.61 trillion (2011 est.)
$77.71 trillion (2010 est.)
note: data are in 2012 US dollars
[see also: GDP country ranks ]
GDP - real growth rate:
3.7% (2011 est.)
5.1% (2010 est.)
[see also: GDP - real growth rate country ranks ]
GDP - per capita:
$12,200 (2011 est.)
$11,900 (2010 est.)
note: data are in 2012 US dollars
[see also: GDP - per capita country ranks ]
GDP - composition by sector:
Labor force - by occupation:
8.4% (2011 est.)
note: 30% combined unemployment and underemployment in many non-industrialized countries; developed countries typically 4%-12% unemployment (2007 est.)
[see also: Unemployment rate country ranks ]
Household income or consumption by percentage share:
Distribution of family income - Gini index:
37.2 (1998 est.)
[see also: Distribution of family income - Gini index country ranks ]
Investment (gross fixed):
23.4% of GDP (2011 est.)
[see also: Investment (gross fixed) country ranks ]
63.8% of GDP (2011 est.)
[see also: Public debt country ranks ]
Inflation rate (consumer prices):
developed countries 2.2% (2011 est.)
developing countries 5.5% (2012 est.)
note: the above estimates are weighted averages; inflation in developed countries is 0% to 4% typically, in developing countries, 5% to 10% typically; national inflation rates vary widely in individual cases; inflation rates have declined for most countries for the last several years, held in check by increasing international competition from several low wage countries, and by soft demand as a result of the world financial crisis (2012 est.)
[see also: Inflation rate (consumer prices) country ranks ]
Stock of narrow money:
$25.53 trillion (31 December 2011 est.)
[see also: Stock of narrow money country ranks ]
Stock of broad money:
$78.76 trillion (31 December 2011 est.)
[see also: Stock of broad money country ranks ]
Stock of domestic credit:
$101.5 trillion (31 December 2011 est.)
[see also: Stock of domestic credit country ranks ]
Market value of publicly traded shares:
$56.37 trillion (31 December 2010)
$48.71 trillion (31 December 2009 est.)
[see also: Market value of publicly traded shares country ranks ]
$18.13 trillion (2011 est.)
[see also: Exports country ranks ]
Exports - commodities:
$18.01 trillion (2011 est.)
[see also: Imports country ranks ]
Imports - commodities:
Debt - external:
$63.6 trillion (31 December 2011 est.)
note: this figure is the sum total of all countries' external debt, both public and private
[see also: Debt - external country ranks ]
Stock of direct foreign investment - at home:
$19.05 trillion (31 December 2011 est.)
[see also: Stock of direct foreign investment - at home country ranks ]
Stock of direct foreign investment - abroad:
$20.63 trillion (31 December 2011 est.)
[see also: Stock of direct foreign investment - abroad country ranks ]
NOTE: The information regarding World on this page is re-published from the 2013 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of World Economy 2013 information contained here. All suggestions for corrections of any errors about World Economy 2013 should be addressed to the CIA.
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This page was last modified 11-Mar-13
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