Emerging countries accelerating ahead, advanced economies lagging behind
World GDP expanded by 7% between 2007 and 2011. This encouraging figure is mainly due to “Emerging countries” dynamism as they registered double digit growth over the period (near 20%) whilst “Advanced economies” struggled to recover, dampened by euro zone crisis. Indeed, with the exception of the euro zone which accounts for slightly more than 1/5 of world GDP (1/3 of OECD GDP), all countries seem to have reached and even exceed quickly their pre-crisis (2007) GDP level. In that context, the distinction between emerging and advanced economies might seem counterintuitive as for those so-called “in advance”, clear recovery is still slow in coming, while for emerging countries it has already happen. Actually, this confusion should be out of place as these terms refer more to structural aspect (wealth expressed by GDP per capita, quality of institution) than to short term analysis.
Under or above water: even advanced economies are different
“Developed world” GDP growth analysis reveals strong disparities. Regarding the main economies, growth rates vary from -4% to +9%. If it is true that these countries are all classified as “developed countries” because of their high level of wealth and quality of institutions, it could be useful to split them for more short-term analysis. With this in mind, GDP growth graph between 2007 and 2011 reveals 3 groups of countries:
(i) the “advanced economies under water”, which includes Italy, Japan, UK and Spain,
(ii) the “advanced economies just above water” of which France, US and Germany, and
(iii) the “advanced economies completely above water” in which we find Canada and Australia.