In this article, we will take a look at the fastest growing economy in the world this year. If one country is insufficient to cater to your economic appetite, then you can take a look at the full list by clicking on 24 Fastest Growing Economies in the World in 2024.
If there’s one thing that can be said for certain it’s that the global economy has been in a constant state of flux since the coronavirus disrupted the global way of living in 2020. This has had its impact on economic growth, with estimates suggesting that if the virus hadn’t struck, then the US economy would have added $14 trillion to its output or GDP.
Globally, the virus had a strong impact on economies, as it reshaped how countries interact with each other. Among several economic indicators related to a country’s health, one is its current account balance. This is the difference between a nation’s imports and exports. Struggling countries, or those which consume rather than produce, often have large current account deficits which leaves them vulnerable to external financing shocks.
According to estimates from the International Monetary Fund (IMF), due to the virus, global current account balances as a percentage of GDP in 2019 grew from 2.9% to 3.2% in 2020. This reflected an incoming surge in prices in some countries as they scuttled to raise capital to finance consumption. The effects of the pandemic, coupled with the global disruption of the energy industry after the Russian invasion of Ukraine have led to a reshaped global economic environment in 2024. One country benefited from the invasion and you might find out which one it is later on.
The turmoil and turbulence have not paused global economic growth in 2024. In fact, GDP growth has been the center of attention in the world’s largest economy, the United States. The US economy, much to the surprise of nearly everyone involved, has managed to avoid a recession for the past five quarters. The latest figures show that America’s economy grew by 1.6% in the first quarter, for another surprising set of results that undershot estimates of 2.4%. This performance came at a time when interest rates in the US were at a 23 year high and they also demonstrated the impact of these rates in the form of a growth drop.
Globally, one country that has been quite interesting when it comes to GDP growth in 2023 is India. According to the IMF, whose 2023 economic growth estimates of 3% were nearly on the dot, India was the eighth fastest growing economy in the world in 2023. Its GDP growth in 2023 stood at 7.8%, and while the rank isn’t surprising, what happened during the previous years, is.
This is because when we take a look at different national economic growth rates in 2022, 2021, 2020, and 2019, then during these years, India ranked 34th, 33rd, 127th, and 71st, respectively. It’s quite a bit of a jump to suddenly start ranking in the top ten fastest growing economies in 2024 at a time when several well heeled economies the likes of Japan and Germany have been struggling.
Taking a look to see what lies ahead of us this year, the OECD was out with some cautiously optimistic figures in its economic outlook report issued in May 2024. It expects the global GDP to stay flat in growth terms and grow by 3.1% in 2024. Despite its recent lackluster showing in the first quarter, America’s economy can grow by 2.6% in 2024 but slow down to 1.8% in 2025, believes the body. On the inflationary front, there’s good news all around as the OECD’s data shows that inflation in the US, Eurozone, and Japan will hover around the 2% mark in 2025. Future projections in this data set also show that high interest rates and a slowdown can affect the US standing in the list of the world’s fastest growing economies in 2025.
This is because while the OECD’s 2024 economic growth projections make America the 11th fastest growing country, the 2025 growth figure can change this to the 34th position. Of course, given the ongoing boom in artificial intelligence and initiatives like the CHIPS and Science Act and the Inflation Reduction Act, the US economy might very well surprise everyone just as it did for the last year or so.
Finally, before we get to our coverage of the fastest growing economy in 2024, it’s important to see what the global interest rate outlook is. High rates lead to slow growth, and on this front, Bloomberg had some estimates in April 2024. Bloomberg Economics’ “aggregate measure of borrowing costs” in advanced economies is set to drop by just 100 basis points this year, which is much slower than the 435 basis points of hikes since the start of policy tightening in mid 2021. However, global chief economist Tom Orlik was optimistic, as he commented that while 2024 was initially feared to experience slow growth, “looking more like a year of resilient growth, persistent price pressure, and policy normalization that starts later and proceeds at a more measured pace.“
An oil worker wearing a hard hat and a safety vest checking an industrial oil pump.
Which is the Fastest Growing Economy in the World in 2024?
Our Methodology
To compile our list of the 24 fastest growing economies in the world in 2024, we used the IMF’s GDP growth data from 2019 to 2023, averaged it, and then picked out the top ranking countries. Insider Monkey is a financial news website focusing on hedge funds. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Guyana
Average GDP Growth: 32.86%
According to these calculations, Guyana had an average GDP growth rate of 32.86% over the past five years. This makes its growth percentage more than 4x the rate of the second fastest growing economy in 2024.
Guyana is an unsurprising part of and the highest ranking country on our list of the fastest growing economies in 2024. This is because it is at the center of some of the hottest developments in the global crude oil industry. Guyana’s economy is worth $16.3 billion, which lends it a GDP per capita of $20,564. So why is its economy growing in double digit percentages?
Well, US mega oil giant Exxon Mobil Corporation (NYSE:XOM) is at the center of Guyana’s fortune. It discovered a block of oil estimated to have at least ten billion barrels offshore in 2015. Production started in 2019 and led to Guyana’s GDP growth jumping from 4% in 2019 to a whopping 43.5% in 2020. Production touched 650,000 barrels this year, and it has also led to conflicts with Guyana’s neighbor Venezuela.
As if this weren’t enough, BMI expects Guyana’s economic growth to sit at a stunning 115% over the next five years according to a September 2023 report. The IMF’s 2024 GDP growth projection for Guyana is 33.9%, However, some quarters have already started to worry about the Dutch Diseases taking hold of Guyana and geopolitical tensions threatening smooth oil production.
To check the free full list, you should read 24 Fastest Growing Economies in the World in 2024.
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Disclosure: None. This article is originally published at Insider Monkey.
