In this article, we will go over the 25 countries with the highest GDP growth rate in the world. If you want to skip our discussion about the global economy, go to 11 Countries with the Highest GDP Growth Rate in the World.
While the global economy is starting to recover from the effects of the pandemic, political crises seem to hinder the recovery. The Russian-Ukraine conflict has added to countries’ vulnerabilities to food supplies as both countries are major global suppliers of grains and edible oil. For perspective, in 2019, the two together produced almost 30% of durum wheat, 25% of non-durum wheat and 25% of refined sunflower oil. In addition, they together produced 71% of crude sunflower oil during that year.
Russia’s invasion of Ukraine also drove unprecedented turmoil in international energy markets as supply restrictions were imposed. Natural gas prices peaked in mid-2022 when they were as much as ten times the normal price. The Israel-Hammas conflict has also created an atmosphere of uncertainty throughout the world. According to experts, this conflict can disrupt the world economy and even tip it into recession if more countries get involved.
Despite all the concerns and economic headwinds, Asian economies and markets collectively performed well compared to other economies. However, the property market crisis in China has started to impact global markets and might affect Asian economies negatively as well. As per Bloomberg’s report on February 9th, Chinese investors and their creditors are selling their real estate holdings across the globe as they are in dire need of raising cash. In addition, Barry Sternlicht, the chairperson of Starwood Capital Group already reported that more than $1 trillion had already been wiped off of office property values due to borrowing cost hikes worldwide.
According to a report by the IMF, the global economy is projected to grow by 3.1% in 2024 and 3.2% in 2025. While the growth rate is expected to increase in 2025, it will remain below the historical average of 3.8%. This slowed growth is attributed to the worldwide monetary policy tightening, among other factors. The GDP growth rate for advanced economies is expected to decline slightly from 1.6% in 2023 to 1.5% in 2024. However, these economies are expected to rise again in 2025 with a 1.8% growth rate. For longer term forecasts you can see the 25 Largest Economies in the World by 2040.
High-interest rates amid rising inflation have affected many industries negatively. This is particularly true for the real estate sector, as high mortgage costs and a weaker business environment drove down the demand for houses. In addition, the retail sector suffered from decreased demand as consumers had less disposable income. Technology, media, and telecommunication industries are also highly dependent on debt and face higher borrowing costs, which negatively affect their profitability.
Rising interest rates are good news for banking companies, such as Bank of America Corporation (NYSE:BAC). The bank and its subsidiaries offer banking and financial services worldwide. Bank of America Corporation (NYSE:BAC) reported on January 12 that its revenue for the fiscal year 2023 reached $98.58 billion, up from $94.95 billion in 2022. Bank of America Corporation (NYSE:BAC) also reported that its net interest income reached $56.93 billion in 2023, up from $52.46 billion in 2022
Another bank benefiting from high-interest rates is Wells Fargo & Company (NYSE:WFC). It offers a range of banking, investment, mortgage, and commercial and consumer financial products. Wells Fargo & Company (NYSE:WFC)’s revenue for the year 2023 reached $82.59 billion, up from $74.36 billion in 2022. The net interest income of Wells Fargo & Company (NYSE:WFC) grew by 16.5% year over year, earning the company $52.37 billion.
African and Asian countries constitute the majority of the countries on our list of the 25 countries with the highest GDP growth rate in the world. Except for a few, these countries have less than half a trillion GDP, and a substantial number of countries are among the poorest in the world. This is in accordance with the idea of convergence in economics. It is a hypothesis that poorer economies’ per capita income tends to grow at faster rates than the richer economies. It implies that developing countries have the potential to grow at a faster rate than developed countries because of diminishing returns in developed economies.
With that backdrop, let’s look at the 25 countries with the highest GDP growth rate in the world.
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Methodology
To curate our list of the 25 countries with the highest GPD growth rate in the world, we relied on data from the International Monetary Fund. We utilized the latest figure of the real GDP growth rate for each country and selected the top 25 countries for our list. As a tie-breaker, we used the overall GDP of the country. So, if countries A and B have the same GDP growth rate but country B has a higher GDP, it ranks higher on our list.
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25 – Kenya
Real GDP Growth Rate – 5.3%
Kenya is one of the countries with the highest GDP growth rate. The country recorded an average growth rate of 4.5% for the decade ending in 2022, which was higher than the 3% average of Sub-Saharan Africa.
24 – Antigua and Barbuda
Real GDP Growth Rate – 5.4%
Antigua and Barbuda is experiencing a high GDP growth rate, thanks to the tourism and construction activity in the country. The country has a primarily service-based economy.
23 – Uzbekistan
Real GDP Growth Rate – 5.5%
Uzbekistan is 23rd on our list of the 25 countries with the highest GDP growth rate in the world. The country has a relatively closed economy, but its economy has been growing steadily because of its vast natural resources of oil, natural gas, and gold.
22 – Guinea
Real GDP Growth Rate – 5.6%
Although Guinea is one of the poorest countries in the world, it is part of our list. The country has one of the largest bauxite reserves in the world, along with significant iron, gold, and diamond reserves. However, much of the potential of the country remains untapped because of underdeveloped infrastructure.
21 – Uganda
Real GDP Growth Rate – 5.7%
Uganda is primarily a service sector country, as it accounts for more than half of its GDP. Other significant sectors in the country include Agriculture, forestry, and fishing, which account for 27% of the GDP.
20 – Vietnam
Real GDP Growth Rate – 5.8%
Vietnam is 20th on our list of the countries with the highest GDP growth rate. Its economy saw a high 8% growth rate at the end of 2022, but falling exports because of monetary tightening in developed countries slowed down the growth rate in 2023.
19 – Philippines
Real GDP Growth Rate – 5.9%
The Philippines’ GDP growth rate in 2023 outpaced major Asian economies such as China and Malaysia. In 2024, its government projects a faster growth rate of as much as 7.5%.
18 – Burundi
Real GDP Growth Rate – 6%
Burundi is one of the countries with the highest GDP growth rate in the world. However, it is one of the poorest countries in the world, with a high dependence on foreign aid as it accounts for half of the government’s budget.
17 – Djibouti
Real GDP Growth Rate – 6%
Although Djibouti is one of the poorest countries in the world, with 75% of the population living below the poverty line, it is one of the countries with the highest GDP growth rates. The country is highly dependent on the tax revenue from in-transit trade flow as it is located in one of the busiest maritime trade routes.
16 – Bangladesh
Real GDP Growth Rate – 6%
Bangladesh ranks 16th on our list of the 25 countries with the highest GDP growth rate in the world. The country has seen remarkable growth recently, with an average of 7% growth over the last decade. Bangladesh has relied on its textile industry as a growth engine for the economy. However, it is a net oil-importing country which led to the slowdown of economic growth in 2023 amid fuel price hikes.
15 – Cambodia
Real GDP Growth Rate – 6.1%
Cambodia’s economy has been growing at an average annual growth rate of 6.9% from 1994 until 2023. Its economy mostly depends on agriculture, but in recent years the importance of manufacturing has been growing. The country is also taking advantage of its fast-developing tourism sector.
14 – Tanzania
Real GDP Growth Rate – 6.1%
Tanzania is 14th on our list of the 25 countries with the highest GDP growth rates. It is among the largest economies in Africa, with a heavy reliance on the agricultural sector.
13 – Gambia
Real GDP Growth Rate – 6.2%
Although Gambia is among the poorest countries in the world, its economy has been growing steadily in recent years. The growth is brought about by the development of the tourism sector and the inflow of remittances. However, the country is still heavily reliant on agriculture, and 75% of its population depends on crops and livestock.
12 – Ethiopia
Real GDP Growth Rate – 6.2%
Ethiopia is 12th on our list of the 25 countries with the highest GDP growth rate in the world. In recent years, the country has succeeded in opening the economy to foreign direct investments, which has resulted in the expansion of commercial agriculture and manufacturing industry.
Click to continue reading and see the 11 Countries with the Highest GDP Growth Rate in the World.
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Disclosure: none. 25 Countries with the Highest GDP Growth Rate in the World is originally published on Insider Monkey.