Many economies are still growing strongly despite difficulties.

Experts had predicted a recession in 2023, as central banks raised interest rates to fight inflation. However, many factors have shown that previous predictions were incorrect. Global GDP only increased by about 3%. The job market is stable. Inflation tends to decrease. The stock market is up 20%.

Assessing economies over the past year, The Economist magazine assessed through 5 indicators: Inflation, inflation fluctuations, GDP, job market and stock market performance. There were 35 economies included in the survey (mostly developed economies).

Greece tops the rankings for the second year in a row - a remarkable result for an economy that is considered to be flawed. Many other economies ranked behind Greece also show strong economic growth in 2023, such as the United States, Canada, Chile, South Korea, the United Kingdom, Germany, Sweden, and Finland.

Rising prices are a major challenge in 2023. The first factor considered by The Economist is core inflation (the change in the price of goods and services but excluding food and energy). In this factor, Japan and South Korea are basically assessed to have done well.

In Europe, Switzerland's core inflation rose just 1.3% year-on-year. But many other economies in the old continent are still under pressure. In Hungary, core inflation is at 11%. Finland, which relies heavily on energy supplies from Russia, is also struggling to fight inflation.

The second factor is inflation volatility. This is something that most economies around the world are dealing with on a global basis. In Korea, for example, inflation fell from 73% to 60%.

But many other economies have yet to beat inflation. In Australia, inflation is still running at more than 2% a year. France, Germany and Spain are also struggling.

In terms of both employment and GDP growth, no economy is showing any signs of improvement. Global economic growth is generally weak, holding back GDP growth. The labor market was already tight in early 2023, leaving little room for improvement in employment.

Some countries actually saw their GDP shrink. Ireland’s fell by 4.1%. Britain and Germany also underperformed. Germany struggled with the fallout from an energy price shock and increased competition from imported cars. Britain is still dealing with the fallout from Brexit.

In contrast, the US has performed well in both GDP and employment, benefiting from record energy prices and fiscal stimulus in 2020 and 2021. The US stock market, home to many AI companies, has performed only moderately.

The Australian stock market is home to commodity-listed companies that have struggled with rising prices. The Finnish stock market had a bad year as Nokia’s share price continued to fall. In contrast, Japanese companies are experiencing a renaissance thanks to corporate governance reforms. The Japanese stock market is one of the world’s best performing in 2023, up nearly 20% in real terms.

But it was the Greek stock market that made the biggest impression. The real value of listed companies increased by more than 40%. Greece has implemented a series of market reforms that have attracted investors. Although the economy still has shortcomings, the International Monetary Fund (IMF) has praised Greece for its “digital transformation of the economy” and “increased market competition.”

Source