Contemporary approaches to classification of the countries and comparative analysis of the key macroeconomic indicators of the leading world economies
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63-Article Text-121-1-10-20191008
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- MACROECONOMIC INDICATORS OF THE LEADING WORLD ECONOMIES
- Analysis of inflation rates
- Analysis of unemployment rates
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CONTEMPORARY APPROACHES TO CLASSIFICATION OF THE COUNTRIES AND COMPARATIVE ANALYSIS OF THE KEY MACROECONOMIC INDICATORS OF THE LEADING WORLD ECONOMIES Nareenad Panbun
The article is dedicated to the analysis of approaches to classification of the countries in accordance with the new UN report “World Economic Situation and Prospects 2018”. Further, the authors analyze the dynamics of the key macroeconomic indicators (such as growth, inflation, unemployment) in the G7, G20 and BRICS countries.
transitional economies, unemployment rate, inflation rate, economic growth.
The modern world economy is a dynamic mechanism consisting of various categories of countries that are also undergoing permanent changes. At the end of 2017, the United Nations prepared the report “World Economic Situation and Prospects 2018” (WESP). The report contains 3 chapters and statistical annexes. The first chapter presents an assessment of the prospects for the global economy for 2018–2019. on indicators such as economic growth, investment, international trade, capital flows, the labor market, poverty problems, as well as forecasts of changes in prices, interest rates, monetary and fiscal policies. The second chapter is devoted to risks and uncertainty in the face of strengthening protectionist trends in trade policy, as well as changes in international politics, taking into account the need to ensure sustainable development. The third chapter contains information on the economic development of certain categories of countries and continents. Using the data from the above-mentioned report, in our article we would like to dwell primarily on the following issues: - analyze the new classification of countries of the world presented in the report in 2017; - on the basis of the data presented in the appendix to the UN report, conduct a comparative analysis of individual categories of countries by indicators such as GDP growth, inflation, unemployment. Classification of countries of the world of the UN 2018 For the purposes of analysis, the UN divides all countries of the world into three broad categories: developed countries, transitional (transitive) economies and developing countries. Within each category, subgroups are distinguished, for example, by geographical feature. Geographic regions for developing countries are Africa, East Asia, South Asia, West Asia and Latin America and the Caribbean. Also, a separate category in the UN classifier is the category of fuel exporting countries. An economy is classified as a fuel exporter if the share of fuel exports in its total merchandise exports exceeds 20%, and the volume of fuel exports is at least 20% higher than the volume of fuel imports to the
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country. This criterion is based on the share of fuel exports in the total value of world trade in goods. Coal, oil and natural gas act as fuel. Another commonly used UN classification is an indicator of the level of development of countries, which is measured by gross national income (GNI) per capita. According to this criterion, 4 groups of countries are distinguished: countries with a high level of income, income above the average, income below the average, and low income. To ensure compatibility with similar classifications used in other countries, per capita GNI thresholds are set by the World Bank (Wajeetongratana, 2019). The list of least developed countries is determined by the United Nations Economic and Social Council and, ultimately, by the General Assembly based on the recommendations of the Development Policy Committee. The main inclusion criteria require compliance with certain threshold indicators for GNI per capita, quality of life index and economic vulnerability index: low income criterion (average annual GDP per capita for three years is less than 750 US dollars for inclusion in the list, above 900 US dollars for delisting); the criterion of the weakness of human resources, calculated using the index of real quality of life based on indicators: a) nutrition; b) health; c) education; d) adult literacy; economic vulnerability criteria calculated using the economic vulnerability index.
For analysis, we selected the countries of the G7, G20, the countries of the Eurasian Economic Union (EAEU), as well as the BRICS countries (this sample is determined primarily by the economic influence of the selected categories of countries and their role in world trade). The analysis of economic growth indicators "Big Seven" If we analyze the dynamics of economic growth in the G7 countries, it can be noted that 2009 was a crisis for all countries - in all economies there was a recession due to the consequences of the global financial crisis of 2008. Moreover, this indicator reached its maximum in 2010 ( 4.1%). In group G7, Canada had the highest economic growth rate in 2017 (3%). The economy of Canada in a situation caused by the global world crisis of 2008-2009, showed good stability. After the country emerged from the recession, its position in the list of world leaders in terms of investment attractiveness and GDP growth The lowest GDP growth rate in the G7 group in Italy (1.5%). Since 2014, there has been an increase in GDP. However, the economy of this country is recovering after the crisis more slowly than in other European countries. The main reason is the decline in productivity, which is why Italy has not kept pace with the fast changes in the world over the past quarter century. Part of the problem of poor productivity in Italy is caused by government inefficiencies and deep-seated business habits.
The analysis of economic growth rates in the countries of the “Big Twenty (G20) shows that the most dynamically developing economies for 2009–2018. steel China and India. For the group of G20 countries, we can distinguish the countries with the highest average rates of economic growth: China (7.9%), India (14.78%). The average G20 economic growth rate for 9 years was 3.31%. In 2017, the G20 group has the highest economic growth rate in China (6.8%). According to data released by the IMF, the contribution of China's economy to global economic growth exceeds 25%, and the country remains the most important driver of
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global economic growth. At the same time, extensive growth, based on scale and pace, has been replaced by intensive, focused on quality and profit.
Analysis of the dynamics of economic growth in the BRICS countries in 2009–2018 allows us to conclude that China and India show phenomenal growth rates. In 2017, South Africa had the lowest economic growth rates (0.6%). This can be explained by the political instability of the country. State-owned enterprises received loans worth $ 14 billion, although it is obvious that they will never be able to repay them. Rating agencies simply cannot overlook the government’s inability to solve this problem. According to Moody’s, the rating of this country at the last stage of the investment level is BBB–. But the rating outlook is negative.
Analysis of inflation indicators of the G7 countries in 2009–2018. allows us to conclude that in all the economies under consideration it was at the level of 1–2%, and in some years deflation was noted (for example, in the USA in 2009, in Japan in 2009–2012 and in 2016, in Italy in 2016). The average inflation rate for the study period for G7 countries as a whole was 1.3%. The highest average inflation rate was recorded in the UK - 2.3%, due to its relatively high rates in 2010 (3.2%) and in 2011 (4.5%). The lowest average inflation rate is in Japan (0.31%), which is associated with deflationary trends in the country's economy. Among the G7 countries in 2017, the lowest inflation rate is observed in Japan (0.3%). The Central Bank of Japan has been trying to raise inflation to 2% since 2013, in order to accelerate the country's economic growth, this indicator could not be achieved. The highest inflation rate in 2017 is in the UK (2.8%). In 2017, consumer prices jumped. Mostly, the pressure on inflation was exerted by the prices of computer games and airline tickets, as well as fuel prices. Inflation rates in the G20 countries differ quite significantly, since in addition to developed countries, this group includes a number of developing economies, such as, for example, Argentina with galloping inflation in the range from 15% to 42.5% per year. The average value of G20 inflation over 9 years was 4.6%, which is slightly higher than the values recommended by the European Union. Moreover, Argentina has the highest average inflation rate (and this is not surprising) (25.06%). The situation with the inflation rate in the BRICS countries looks generally stable enough: only Russia and India in some years went beyond 10% of the inflation rate. Over the study period, the lowest average inflation rate among the BRICS countries was recorded in China - 2.27%. The highest average inflation rate in Russia (7.76%). The average value of inflation in the BRICS countries for the study period is 5.9%. Among the BRICS countries, the highest inflation rate in 2017 was in South Africa (5.6%), which was due to an increase in consumer prices. The lowest inflation rate reached in China (1.5%). As for inflation in China, after 1995 its average annual level (in terms of the GDP deflator) has never exceeded 6%, and in 1998, 1999 and 2002, the Chinese economy also grew under deflationary conditions. According to experts, this was largely facilitated by increased competition caused by an active antitrust policy and a gradual decrease in trade barriers (from 42.9% in 1992 to 12.3% in 2002); reform of state-owned enterprises and the growth of private enterprise; decrease in external demand due to the financial crisis of 1997-1998 and a small budget deficit (1% of GDP in 1996 and 2.5% in 2003). ACTUAL ECONOMY: LOCAL SOLUTIONS FOR GLOBAL CHALLENGES
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The decrease in price dynamics was also supported by a moderate monetary policy: the growth rate of the money supply in 1993–2003. decreased from 47 to 20%. However, the steadily high investment rate is considered a distinctive feature of the Chinese economy, which allows combining low price dynamics with record growth rates. Its average value over the past ten years has been 40% of GDP. In 2003, the weight of investments in the gross product exceeded 44%. The latter, in the context of their growth, increases, automatically expanding the supply of goods and services and reducing their price dynamics. This ensures an increase in labor productivity. According to a number of experts, it is it that is the second most important factor in China for slowing inflation (after an inertial price increase). Consumer expenses do not possess such properties. Their increase is inevitably accompanied by inflation, accelerating as cash capacities become available. Therefore, economic policy, based on the predominant stimulation of consumer demand, is in some respects a stalemate: either an increase in economic and price dynamics, or low inflation and a slurred increase in production.
If we analyze the unemployment rate in the G7 countries, we can note that not all countries satisfy the threshold level of unemployment set by the International Labor Organization (8-10%). For the analyzed period, the lowest unemployment rates were in Japan (did not exceed 5.1%), and the highest - in Italy (more than 12% in some years). A similar trend is observed in the average level of unemployment over a nine-year period. The average unemployment rate for G7 countries over 9 years is 7.15%. In 2017, the G7 group had the lowest unemployment rate in Japan (2.8%). This is the lowest figure since 1993. An analysis of the unemployment rate for the G20 countries shows negative trends in the economy of South Africa - here the unemployment rate for the analyzed period did not fall below 23.5%. Also, countries such as France, Turkey, Italy, Brazil did not fit into the ILO standards in some years. The average unemployment rate in the G20 in 2009–2017 - 7.32%. High average unemployment rates were observed in South Africa (24.94%), Italy (10.84%). The lowest average unemployment rates were noted in countries such as Japan (3.89%), India (3.54%), South Korea (3.46%). In 2017, Japan had the lowest unemployment rate among G20 countries (2.8%). The highest rate in South Africa (26%). This is because African countries are the poorest countries in the world. This means that the population does not have enough income to show demand in the consumer market, which, in turn, does not contribute to the increase in production. It is worth noting that unemployment among young women is especially high due to some national characteristics. A weak legislative framework does not protect African citizens and repels potential investors. An important fact is the unstable political situation in the country. In the BRICS countries, the situation with unemployment is as follows. Low unemployment rates for the reporting period are observed in China and India (from 3.5% to 4.6%), while Brazil and South Africa do not fit into ILO standards. The average unemployment rate for the BRICS countries over 9 years is 9.43%. In 2017, in the BRICS countries, India had the lowest unemployment rate (3.4%). Indian authorities pay close attention to the problem of imbalances in the labor market. Despite the high population, government measures can alleviate the problem of unemployment. The fight against unemployment in India is mainly carried out through professional retraining of workers. It also considers the introduction of credit mechanisms for young ACTUAL ECONOMY: LOCAL SOLUTIONS FOR GLOBAL CHALLENGES
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people to obtain skills relevant to the labor market. In addition, Indian authorities are stimulating demand for labor. The country has a scheme according to which the state assumes the costs of employers for payments to various funds when hiring workers with physical disabilities. The highest unemployment rate in 2017 was observed in South Africa.
Among the trends characterizing the main macroeconomic indicators of the countries under consideration, the following can be distinguished: - in all the economies under consideration in 2017 (and in accordance with the forecast for 2018) there are no stagnation trends, all economies show GDP growth. The largest economic growth is traditionally demonstrated by China and India (6.5% and 7.2% respectively), as well as Indonesia and Kyrgyzstan (5.3% and 5.8%); - In the field of inflation, the situation is also generally favorable. In 2017 and the forecasted 2018, an excess of 10% of the level is observed only in Argentina and Turkey. In the United Arab Emirates, deflation was generally observed in 2017; With regard to unemployment, in 2017 and 2018, a 10% ILO threshold is exceeded in countries such as Italy, Turkey, Brazil, South Africa, and Armenia. Summing up, I would like to note that the world economic situation is traditionally characterized by a situation far from stability. A huge number of economic and political factors influence the state of the economies of the world (these are oil prices, technological breakthroughs and discoveries, aggravation of political conflicts, and much more). The analysis of macroeconomic indicators allows you to get a comprehensive picture of what is happening in the world's leading economies, highlight positive and negative trend
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World. Retrieved April 08,
2018, from https://www.un.org/development/desa/dpad/document_gem/globaleconomic-monitoring- unit/world-economic-situation-and-prospects-wesp-report/ Download 495.27 Kb. Do'stlaringiz bilan baham: 
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